Your financial circumstances might sometimes mean that you require professional advice to make sure that you make the correct decisions and take the correct actions.
A professional adviser will help you to prioritise your financial goals and give you an understanding of the bigger picture, taking into account other important factors such as any potential tax implications and investment risk. There are thousands of different financial products and investments available and choosing the right one for you can be difficult and at times confusing.
Do you need financial advice?
You may find it helpful to speak to a financial adviser if you are not sure what you need to do or are feeling confused about the options available to you. Financial advisers can help you with a variety of things, such as:
- Providing an income after you stop work
- Saving and investing your money
- Buying and insuring your home
- Insuring yourself and your family against illness, disability or premature death
- Passing your assets on to the next generation tax efficiently
- Changing personal circumstances such as starting a family, redundancy, divorce or bereavement
Once your financial adviser has recommended a plan to help you achieve your financial goals it should generally be reviewed on a regular basis to ensure it remains appropriate to your circumstances and accommodates any changes to your priorities.
What does professional financial advice cost?
Financial advisers usually charge for their services in one of (or a combination of) the following methods:
- an hourly rate – typically averaging around £150 – £250, but can be higher for specialist advice;
- a percentage of the money invested – this can vary depending on the size of the initial investment and will typically be 0.5% to 3%. An annual charge for reviewing an investment portfolio is likely to be 0.50%-1%;
- a fixed project fee – typically £1,000 – £5,000 for a specific piece of research and advice work;
- some firms may also charge clients a monthly retainer fee of between £50-£100.
Fees vary depending on the experience and qualifications of the adviser and the geographical location of the business.
Advisers are no longer paid commission, except for certain non-investment product recommendations, and they have to explain to you how much the advice will cost you. You will need to agree this and how you will pay for it before any advice is provided.
What should I be looking for when dealing with an adviser?
It is important to understand whether your adviser is regulated to provide investment and financial advice in Jersey. A regulated advisory business needs to have in place professional indemnity insurance, which would provide their clients with an additional level of security.
A professional regulated adviser will be able to draw your attention to the potential pitfalls of what may seem a fool proof way to get a much better return on your assets. This is becoming more common place because traditional methods of generating returns on your capital such as bank deposits and low risk investments are currently providing little or low returns than in previous times.
The following list is a prompt for some of the questions you can ask your financial adviser.
- Are you regulated to provide financial advice?
- What is you experience?
- What types of clients do you work with?
- What are your qualifications?
- Do you offer an area of expertise?
- How much will the advice cost?
- What information will you need from me?
- What are the risks associated with the recommendation?
Financial planning involves revealing detailed personal financial information and can involve divulging information about your goals and ambitions, so you need to be comfortable in the company of an adviser. It is worth meeting a few to determine who you are most comfortable working with in an ongoing professional relationship.
There are two great truths when considering investments
- If it looks too good to be true it generally is
- Don’t put your investment eggs in one basket
The world is at your ‘keyboard’ when using the internet to research or book your holiday or other travel arrangements.
Take a moment to check out all the risks even if you think you may be aware of them all.
- Fraud resulting from making payments over unsecured web pages
- Flight scams:
- Where you book a flight and receive a fake ticket, or pay for a ticket that never arrives.
- Holiday scams:
- Fake websites and email offers for holidays or villas that do not exist. They require you to pay a deposit, which you never see again.
- Fake competition scams defrauding you out of a fee to secure a holiday.
- Inadvertently advertising the fact that your house will be empty when you are away, by posting on social networking or travel tracking sites. Some insurance companies are now rejecting claims if homes are targeted by burglars while the owners are away on holiday and made reference to it on social networking sites.
- Ensure that any holiday or travel company unfamiliar to you is reputable by researching them online. Ensure that they are a member of a recognised travel authority which offers financial protection and a complaints service.
- When possible, pay for holidays and travel using your credit card as this offers additional financial protection over other methods. Please note that your holiday or travel company may levy a surcharge for credit card payments.
- Double check all details such as travel dates, itineraries, destinations and travellers before confirming payment, as you may be charged for amendments.
- Take out travel insurance adequate for your destination, activities and everyone in your party.
- Do not reply to unsolicited emails from companies you don’t recognise.
- If renting a private apartment or villa, call the owner/agent directly to ensure that it is legitimate. If the number is not provided, email and request it. Check reviews on TripAdvisor or similar sites.
- Get the full address of the property and find it on Google maps to check its location and legitimacy.
- Prior to payment, obtain a contract setting out terms and conditions of the rental, deposits, payment terms etc.
- Before entering payment card details on a website, ensure that the link is secure, in three ways:
- There should be a padlock symbol in the browser window frame, which appears when you attempt to log in or register. Be sure that the padlock is not on the page itself … this will probably indicate a fraudulent site.
- The web address should begin with ‘https://’. The ‘s’ stands for ‘secure’.
- If using the latest version of your browser, the address bar or the name of the site owner will turn green.
- Some websites will redirect you to a third-party payment service (such as WorldPay). Ensure that these sites are secure before you make your payment.
- Safeguard and remember the password you have chosen for the extra verification services used on some websites, such as Verified by Visa.
- When making a payment to an individual, never transfer the money directly into their bank account but use a secure payment site such as PayPal, where money is transferred between two electronic accounts.
- Always log out of sites into which you have logged in or registered details. Simply closing your browser is not enough to ensure privacy.
- Keep receipts for all online holiday or travel bookings and payments.
- Check credit card and bank statements carefully after booking to ensure that the correct amount has been debited, and also that no fraud has taken place as a result of the booking.
- Before you post details of your travel dates on social networking or travel tracking sites, ensure that the correct privacy settings are in place.
- Ensure you have effective and updated antivirus/antispyware software and firewall running before you go online.
Please refer to the following websites for more information:
ABTA Association of British Travel Agents
ATOL Air Travel Organisers’ Licensing
AiTO Association of Independent Tour Operators
SCAM Letters …are attempted fraud
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Jersey Police, Airtel-Vodafone, Sure, JT & Digital Jersey endorse the ‘Get Safe Online’ campaign for us all to spring clean our computers, laptops, tablets & phones, to help prevent you from becoming a victim of cybercrime.
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Channel Islands Financial Ombudsman
The Channel Islands Financial Ombudsman (CIFO) will commence the resolution of complaints about financial services on 16 November 2015, when its full legal powers are brought into force through the Financial Services Ombudsman (Jersey) Law 2014 (Appointed Day) (No. 3) Act 2015.
CIFO has published the Jersey Fee Scheme and Jersey Levy Scheme, setting out the detail of its funding mechanism. It has also published a consultation paper on a model complaint-handling procedure for financial services providers that can be found https://www.ci-fo.org/cifo-consultations/
The closing date for responses is 30 October 2015.
Staying Secure at Cashpoints
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Top Tips when shopping online…
- Always check out reviews on a web based company
- Ask for recommendations from friends and family to ensure they received reliable and fair service
- Check the terms and conditions .. see if they are poorly written as this may indicate a site outside of the UK. You need to be aware of where the site is based as this impacts on your consumer rights.
- Make sure the company shows a full postal address