Savers should plot their escape from zombie funds?

Savers should plot their escape from zombie funds?

Over many years there has been a huge reduction in the number of product providers within the financial services industry, one of the major drivers for this has been the offloading existing policies by large insurance companies who have decided that these clients no longer suit their business strategy. These polices are purchased by specialist providers known as ‘consolidators’ who in turn wish to squeeze the maximum profit from these policies for as long as possible. Tagged as ‘zombie funds’ they are left on the shelf until policyholders either transfer away, retire or die.

The Financial Times ran the headline “More than €1tn of investor money is stuck in ‘zombie’ funds” in February 2020. Many household names including Standard Life, AXA, Scottish Amicable, NPI, Sun Alliance, Legal & General, Old Mutual, Royal Life and Friends Provident have gone down this particular road.

Why should this matter?
Our experience of dealing with consolidators is we see an immediate deterioration of service levels. There is no incentive for the consolidator to develop existing products to reflect legislative and market changes. Investment performance can often be affected by fund manager departures. The assessment by, a specialist website, found billions of pounds languishing in poor performing “with-profits” funds. If you are affected by any of these changes, we have a variety of options which can help them find a solution.

By Philip Harper  |  September 2020

How fm can help make your life better

How fm can help make your life better

We believe the best way we can help the happiness and financial health of our clients is by helping them to create a plan focused on their life goals.

A recent survey by psychologist Robert Epstein found that 25% of our happiness hinges on how well we’re able to manage stress. The next logical question is, of course, how best can we reduce our stress?

The stress management technique that worked best, according to the survey? Planning.

In other words, “fighting stress before it even starts, planning things rather than letting them happen,” says Epstein. “That means planning your day, your year and your life so that stress is minimized.”

“Money doesn’t take care of itself, and that fact can create a lot of anxiety,” says the Chair of the Institute of Financial Advisers. “If you don’t plan where you’re going with your money, you may not end up where you want to be. A financial plan can get you on a path toward your goals, which can give you greater peace of mind—and likely, a better night’s sleep.”

Since I started the firm in 1991, my best experiences are when I see plans materialise into reality. It’s also important to be able to reassure a client faced with an unexpected event that their plan is flexible enough to deal with these new circumstances.

We are experienced in helping you think through your issues, opportunities and future goals to create a personalised financial plan and investment portfolio. Working with us gives you the confidence that comes with a better understanding of your financial position. We’ll help you understand your options and build a plan to meet your personal ambitions and aspirations. Your personalised plan will need to respond to changes in your circumstances and financial markets, we help with this too. This is why we do what we do; we believe a plan has the greatest benefit to our clients and is the best way, we can make their life better.

Some people feel comfortable developing their own financial plan, which is fine, but you may prefer to work with a financial planner. Just like an architect helps design a house and a travel agent helps map out a trip, a financial planner can help guide your financial life. There is no ‘one size fits all’ solution for financial planning, our service is personal to you.

By Philip Harper  |  September 2020

How to recognise a financial scam

How to recognise a financial scam

UK fraud prevention groups are warning individuals to be extra vigilant following a huge increase in the number of scams seeking to exploit the pandemic. As these scams increase in sophistication, we are all vulnerable. Fraudsters can be articulate and financially knowledgeable, with credible websites, testimonials and materials that are hard to distinguish from the real thing.

The Financial Conduct Authority (FCA) reminds consumers that like anything valuable, your pension or investments can become the target for illegal activities, scams or inappropriate investments. Scams can take many forms and often appear to be a legitimate investment opportunity.

We have pulled together a list of tips on how best to recognise and avoid a financial scam.

  • Reject offers that come out of the blue.
  • Check who you are dealing with before changing your pension arrangements or transferring money to another account.
  • Be wary of special offers and deals that sound too good to be true.
  • Never give out personal details and passwords.
  • Avoid the pressure to act quickly.
  • Do not click on links or open emails from senders you do not know.
  • Investment opportunities found through search engines are not necessarily authorised or regulated by the FCA.
  • Take time to make checks and seek financial guidance.
  • The FCA helpline is 0800 111 6768 and all investment and pension providers should be registered. Financial Management is registered as Philip Harper LLP and everyone should have a unique number – ours is 485423. Search for the FCA page via Google, do not click on a link within an email.

If you get cold-called, the safest thing to do is to hang up. If you receive unexpected offers by email or text, it’s best to simply ignore them. You can register with the Telephone Preference Service and Mailing Preference Service to reduce the number of letters and cold calls you receive. Callers may pretend they aren’t cold calling you by referring to a brochure or an email they sent you that’s why it’s important you know how to spot the other warning signs.

We are here to help If you are unsure about any financial approaches, please contact us first.

By Philip Harper  |  Aug 2020

Budgeting for retirement

Budgeting for retirement

“Many of our clients have been with us for decades. We have helped them through the evolution of their pension schemes, from inception to maturity. We understand each stage and the associated responsibilities.”
Philip Harper Financial Planner

If you’re prepared financially and physically healthy, retirement can last decades.  Retirement is both an event and a process. In one plausible scenario, your benefits and savings must cover your expenses for three decades or more. The expenses at each stage of retirement are associated with how you choose to spend your time, where you decide to live, and how your health holds up. If you take these factors into account and evaluate how they will change throughout retirement, you can budget accordingly.

To help with this process, we have identified four stages of retirement, each stage has different expenses and requires distinct approaches to budgeting. Here’s what those stages look like and how to handle your finances accordingly.

Pre-retirement Stage
Pre-retirement is the stage just before retirement.  You are still working, but retirement is approaching and you’re finally getting a clear picture of what your income, and expenses will look like. You’re also getting closer to figuring out what you’ll do with your days once you’re free to fill them as you please. What seemed merely theoretical earlier in your working life now starts to seem real.

At this stage, assess your likely income and expenses after you exit the workforce?  Will you have paid off your mortgage, and if not, how much do you still owe and for how long?  You may be in a strong enough position financially to seriously evaluate whether you can afford to retire early.  If you run a family business, this is a good time to create a succession plan.

Pre-retirement is also a good time to re-evaluate your monthly and annual expenses and cut back on costs that have crept up over the years.  Eliminate any wasteful spending and give your retirement budget some breathing room. Also, at this stage (as well as, possibly, the early stages of your retirement), you may still have major expenses like putting your children through further education, helping them with a deposit for a property, or paying for a wedding.  Finally, you might want to replace your usual vacations with trips to places you’ve envisioned yourself moving to during retirement.

Early Retirement
Some of the biggest changes in your budget will occur when you first retire. You’ll no longer receive a regular salary and you’ll need a plan for managing your income during retirement. You might also lose employer-sponsored health insurance.

You may be tempted to go on a spending spree at this early stage of retirement. You’ll have a lot of free time, while still healthy and energetic. In this phase, you might want to buy that sports car you’ve always dreamed of, take an extended European vacation, go to culinary school, or take up sailing. With more freedom to travel, you may want to buy a holiday home to escape the British winters. you can however quickly deplete your savings if you treat retirement like winning the lottery.

One way to manage new expenses in early retirement is to consider a part-time or seasonal job, start a business that gives you flexible hours. Earning £20,000 a year when you need £40,000 is a serious problem, but once you’ve retired, it looks better than earning nothing, and at this point, it’s more about personal satisfaction, anyway. You can also balance the expensive activities you want to spend time on with inexpensive or free ones: volunteer to train service dogs, teach a photography class at your local community centre, or lead biking excursions.

Middle Retirement
By middle retirement, you’ll likely be receiving State Pension.  In addition to receiving more income in this stage, you might be tired of some of the travel and new activities you pursued during early retirement, so your expenses might decrease. You might want to travel less and stay home more, or your travel might be centred around less expensive trips to visit your grandchildren and other friends or family. With luck, your children are established enough in their careers that they no longer turn to you for money.

Late Retirement
You might have new expenses in late retirement if you move to an independent or assisted living facility or if your health means you need to move to a nursing home or hire a home health aide.

You’ll want to reassess your savings and decide whether you should be withdrawing money at a faster or slower rate. If you’re running low on cash and you still live in your home, you might consider Equity Release as a source of funds. Looking at what you have left, you’ll need to think about what you want to spend during your lifetime and what you want to leave to others.

Complete our Budget Calculator and we will send you a report.  This will help you see your current expenditure.

By Philip Harper  |  July 2020

How close are you to achieving your retirement goals?

How close are you to achieving your retirement goals?

Download Your Retirement Options Factsheet via or contact us to discuss your retirement planning with our Lifestyle Cash flow modelling.

We also move from a position saving for the future, to spending now and watching our savings reduce to fund our retirement, which is a significant shift in the way we think about our financial positions.

The retirement decision is an exciting opportunity to transition into a different phase of our lives and will start with some fundamental questions such as…

  • Can I afford to change my work / life balance?
  • When can I comfortably retire?
  • Can I afford my dream retirement now?

 …and quickly gets into the detail….

  • I have pensions through different employers?
  • Should I opt for a “guaranteed” income in retirement?
  • Should I continue to invest my pension fund to provide me with the income I need?
  • Will my family have access to my pension wealth should I die?

 The best way to remove the complexity is to build a financial plan to model your income from your total accumulated wealth. This will help to simplify the retirement options available to you. From the equity in your house through to your pensions and savings, our cash flow planning tool can take in your data and deliver a snapshot of the future and help you shape your retirement to make the very most of your assets.

By Andy Robinson |  July 2020

Are homes now retirement cash machines?

Are homes now retirement cash machines?

Remember when a mobile phone was just that: a mobile phone? When it didn’t connect us to the internet, act as our diary or tell us when the next train is due? Much like our mobiles, the retirement world has changed. The old established view that our income in retirement will be based primarily on our pension will not be enough for most of us anymore.

We need a new way of thinking about retirement. For the majority of us, property is our biggest store of wealth. Yet property is currently used much less than pensions in retirement income planning.

It’s important to think more holistically about wealth to help us achieve the retirements we all want to have.

This approach is so important now due to combination of long-term trends and recent changes to pension and tax laws:

  1. We’re living longer and few of us will enjoy final salary pension benefits.
  2. 57% of over 55s recognise their pension is worth less than their property.
  3. Since April 2015 we can now access more of our pension from age 55.
  4. …but, recent changes to tax rules mean that it is arguably better to use property or other savings and investments first, saving pensions for later.
  5. Many of us will be able to leave pensions to our next of kin, tax-free.

It is clear then that the way we access property wealth and pensions wealth, and the ways we use it are becoming ever more similar.

By Philip Harper  |  July 2020