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How to match your life cover to your mortgage

fb How to match your life cover to your mortgageAnyone who’s watched Strictly Come Dancing will have had the opportunity to appreciate the importance of keeping all aspects of the performance in synch with each other.  If it matters in a 90-second dance routine then it matters even more when looking at protecting your financial future.  Whether you’re looking at savings, investing, insurance or any other financial product, your overall aim should be to improve your personal wealth and every decision you take should lead towards that goal.  Of course, the Strictly celebrities don’t work on their own, they get help from experienced pros, so when looking at managing the family finance, it can help to get some financial advice from a financial adviser.

Make sure all financial products work effectively together

An example of two financial products which very much need to be kept in step with each other is that of mortgages and life insurance.  The fundamental purpose of life insurance is to provide a financial cash cushion for those who are left behind after a death.  In short it allows beneficiaries to focus on dealing with the emotional aspects of bereavement without facing the additional distress of financial difficulties.  The prospect of a grieving partner having to sell the family home due to an inability to meet mortgage repayments is one that can feasibly be averted with forward planning.

Every time your circumstances change, make sure that your finances stay in synch with them

The key point is to ensure that your life insurance reflects the reality of your outstanding mortgage.  Assuming you take out (or update) your life cover when you buy your first home then the level of cover will reflect the amount needed to take care of the mortgage in the event of a death at that point.  If, however, you increase the size of your mortgage for any reason, then you need to ensure that your life insurance cover will still do its intended job.  The most obvious reason for taking on a larger mortgage is, of course, moving house, but you could choose to increase the size of your mortgage for other reasons.  For example you may want to extend your current property as an alternative to having to move.

Be prepared for life’s slings and arrows

As well as looking at the potential consequences of you or your partner dying, it’s also important to think about what would happen in the event of one or both of you being out of work for any length of time.  This could be due to the employment market or alternatively due to serious illness or accident.  Should any of them happen to either of you, then having the right insurance cover in place could make all the difference to your financial and emotional comfort.  In short it could mean the difference between worrying about paying the bills and being able to concentrate on making a full recovery.

In short, insurance is about making sure that you and your loved ones are protected if the worst happens.  It’s probably one of the few products people buy actively hoping that they’ll never need to use it.  For many people, however, it is an essential part of their overall financial planning and needs to be kept up-to-date in line with their changing needs.



5 Estate Agent Tricks That Can Add Value To Your Home

fb 5 Estate Agent Tricks That Can Add Value To Your HomeA house can be a combination of a financial investment and a family home.  It can be a store of personal wealth where adults organize the family finance and children get their first lessons in the importance of having savings.  Buying and selling a home can have major financial implications as well as emotional ones, so it can be a good time to get some professional advice from a financial adviser.  If you’re selling a home, it can also be worth investing a little time and possibly some money on your home to achieve the best possible price.  Here are some suggestions to help you.

Create curb appeal

The first impression of a property is usually from the outside so make sure viewers are impressed.  If your garden is a major selling point then it may be worth speaking to a professional gardener for tips on how to make it look its absolute best.  For example some strategically-placed lighting could highlight its best features to visitors arriving for evening viewings.  Even if you don’t have a garden, you will have an entrance door and some quality fittings (number or name, letter box, door knocker…) can make a huge difference to its appearance.

Make sure viewers are comfortable when they arrive

Viewers aren’t exactly guests but they are people you want to stay in your home for a while and be in a mood to appreciate it.  Make sure that there is somewhere obvious and convenient for them to put their coats and consider having some extra pairs of slippers to offer them (which might also be good for protecting your floors).  Be prepared to offer tea or coffee and some quality biscuits and serve them in attractive cups or mugs.

Remember allergy sufferers

Common allergies include nuts, pet hair and pollen.  It’s therefore worth taking steps to remove any of these before viewers arrive.  While fresh flowers can look very attractive and some viewers will love them, they are unlikely to win you any brownie points from people with hay fever.  Green plants and/or fresh fruit, however, are more allergy-safe and also attractive choices.  Remember to put them in containers which match with the overall décor of the room.

Make sure your home passes the sniff test

Any potentially offensive odours need to be properly banished.  With a view to this, if anyone is in the habit of smoking in the house, then they need to stop doing so until the house is sold and the house will need to be thoroughly aired.  If there are young children or pets that may have accidents then you need to have something on hand to deal with them quickly.  If you have a cat who uses a litter tray then it may be worth upgrading to an enclosed one in case your cat chooses to use it when you have viewers.  Empty it promptly outside of viewing times and keep pet cages scrupulously clean.  While it may be tempting to try to use scent to enhance the atmosphere of your home, it’s worth remembering that individuals react to scents differently.  You therefore run the risk of accidentally fragrancing your home with a scent that you love but your viewer hates.  It’s also worth remembering that pregnant women have an enhanced sense of smell and so even light scents may seem overpowering to them.

See your walls and shelves as others may see them

Remove anything which could be remotely controversial, such as an object showing affiliation to a sports team or political organization.  Take a long, hard look at everything else and decide if it is in keeping with the image of your house that you want to give.  A studio portrait of your children could be an attractive feature in a family home but basic family snapshots are probably better moved out of sight, along with children’s paintings and home-made gifts etc.

Out of Debt, With Savings and On Track for Retirement. So What’s Next?

fb Out of Debt, With Savings and On Track for Retirement. So What's Next

If, in the past five years, you have managed to pay off your debts and start to plan for retirement, you are in a small minority. Despite the urgings of the Chancellor for the nation to live within its means, personal debt was reported last year to have hit record highs.

Britain’s love of spending and the availability of credit has left us more indebted than we were in 2008, but for a diligent few, the rewards of a debt free existence can be savored.

Getting to a level of financial health that means that credit card spending is under control, personal loans are gone, a mortgage is paid off and you have a retirement plan with regular pension contributions may seem like financial utopia, but are there other financial needs to take care of?


The more you save, the more financial security you have, as savings are a way of future proofing yourself against the possibility of redundancy, illness, or major life change that disrupts your power to earn.

Financial expert Alvin Hall suggests that everyone who is earning should try to put away ten percent of their income each month since, according to Hall, the evidence points towards the fact that savers do not notice ten percent leaving their total disposable income.

Keeping track of your spending

One tried and tested method of understanding where your money goes, and subsequently how you can protect it and make it work more effectively for you, is the keeping of a spending and saving diary.

The problem with spending is that we do so much of it unconsciously and we have little idea of precisely how much we are spending (or wasting).

If you have a particular savings goal a financial diary or journal can help to motivate you to stick to your targets, and you can also discover what emotional spending triggers there are. Some people spend too much when they are happy and others fritter money away when they are stressed or miserable.

Goal Setting

A financial diary can help you with goal setting, particularly with big ticket items such as paying off the mortgage, or paying for a child’s university fees.

If you are going to set goals then it’s advisable for them to be SMART (Specific, Measurable, Attainable, Realistic, and Timely). This means that you need to Specify how much you want to save (ideally to the last penny), and to track (Measure) how much you are actually saving each month.

Your saving goals need to be Attainable and Realistic: There is no point in trying to save 80 percent of your income each month if your goal is impossible. All you will teach yourself is that saving is impossible, and this will lead to a downward spiral of declining motivation and you’ll actually be in a worse situation than when you started.

Keeping your goal Timely, or within a particular time frame (say, six months), will also keep you motivated. Things that are too far away (20 years or so), lose their meaning.

Get Advice

Finally, the money you work so hard to earn should ideally be put to work instead of doing next to nothing in a low interest savings account.

Investing is an essential part of any long term wealth protection strategy, which means that it is probably a good idea to get some investment advice before you make any major financial decisions.

This may be a good time to get some financial advice from a professional financial adviser who can give you a clearer picture of your choices and explore how to maximise your money.

If you would like some investment advice, click here for further detail

The Ombudsman – The Consumer’s Champion



ombudsman_blogWhile the Financial Services Authority (FSA) might have become a familiar name, it is now no more.  As of April 2013 regulation of the financial services industry was divided between the Prudential Regulatory Authority (PRA) and Financial Conduct Authority (FCA).  The Bank of England also gained direct supervision for the whole of the banking system through its powerful Financial Policy Committee (FPC), which can instruct the two new regulators.


The Financial Ombudsman Service (FOS) still exists and carries on in its existing role.


What does this mean for me as a customer?


In practical terms the FPC and PRA will have little direct influence on the experience of those who buy financial products.  The FPC monitors the overall health of the financial services sector and regulates it as required, while the PRA monitors the health of major banks and insurance companies and can intercede if it believes that they are acting imprudently.  The FCA is responsible for promoting effective competition, ensuring that relevant markets function well, and for the conduct regulation of all financial services firms. This includes acting to prevent market abuse and ensuring that consumers get a fair deal from financial firms. The FCA operates the prudential regulation of those financial services firms not supervised by the PRA, such as asset managers and independent financial advisers.The FOS acts as a mediator between financial institutions and their customers.


What exactly is the difference between the FCA and the FOS?


The FCA looks at how institutions manage customer service and the strategies they use to sell their products.  It may take action against any given institution if it believes that there are general failings in some aspect of its behaviour but it leaves individual complaints to the FOS.


The FOS is essentially an adjudication service set up by parliament to sort out individual complaints that consumers and financial businesses aren’t able to resolve themselves. It is completely free to customers and if it finds in a customer’s favour the institution must comply with its decision. However, the FOS don’t write the rules for financial businesses – or fine them if rules are broken. That’s the regulator’s job.  The FOS covers a wide range of financial institutions from the main High Street names and their products to payday lenders and pawnbrokers.


How does it work precisely?


The FOS will only take action in a case if the financial institution in question has failed to resolve a dispute to a customer’s satisfaction.  In other words, any complaint should be sent to the institution in question in the first instance so that they have an opportunity to investigate and rectify it.  They have 8 weeks in which to do so.  At that point, if the customer is still left unsatisfied by the institution’s response they may proceed to the FOS.


Once the customer has set out their complaint, the FOS will need to gather all relevant information in order to come to a fair decision.  Depending on the complexity of the complaint this may take anything from a few weeks to several months.  The FOS aims to be as quick as possible but also has to be thorough and fair to both parties and many of the complaints it handles require it to understand a complex set of unique circumstances.


Payment Protection Insurance (PPI) complaints are a typical example of this.  Once the regulator has all the facts it will take a decision and inform both parties of it in writing.  If the FOS finds in the customer’s favour, the institution must comply with the decision.


What happens if my complaint is upheld?


Basically, the FOS aims to relieve you of the impact of the institution’s failing so it will award a level of compensation which it feels will achieve this.  For example it might order an insurer to uphold a claim or a lender to refund the cost of a mis-sold product.  It is highly unusual for the FOS to award compensation for inconvenience and distress and on the rare occasions when it does so, awards tend to range between £200 and £1000.


While the FOS has the authority to require institutions to make payments to customers, only the FCA can levy fines or other penalties on them.  The FOS’s role is as arbitrator; regulation is a completely separate matter.

Is Britain Having A Tech Boom?



Tech Blog ImageIn 2002 half a decade of heady excitement about the money making potential of the Internet came to a shuddering halt.


Several years of over investment, mainly in the US, and mainly in dot com businesses that looked like interesting and worthwhile projects (but seemed incapable of making any money), caused what we now know as the dot com crash.


It was the first major financial calamity of the internet age but it is unlikely to be the last. Ever since, whenever companies such as Facebook or Twitter have been floated on the stock exchange, financial commentators have muttered the words ‘dot com’ and ‘crash’ ominously.


There is good reason to be cautious with investments in new technology and online ventures; the rate of dot com failures is extremely high and for every Instagram or Facebook type business there are countless failed ventures.


Even with the chances of tech success being so low, it hasn’t stopped a generation of UK based start ups from helping to build a vibrant new part of the technology sector in the UK.


The good news for skilled IT professionals in the field is that the tech sector is keen to hire, with over a third of start ups looking for new staff.


It is predicted that the sector will contribute £12bn to the economy over the next decade, and the recent London Technology week saw an influx of 30,000 visitors to the capital to see how Britain’s tech sector was powering ahead.


This is all good news, especially if you work in the IT sector, but how does it affect the rest of the economy?


Global trends forecaster Oxford Economics has predicted that the tech sector could produce nearly 50,000 jobs in the next decade, which is not an inconsiderable amount.


Whether Britain is capable of producing 50,000 skilled ICT professionals in that time is something of a different matter.


If she can, then the economy will have succeeded in creating a large number of well paid, highly employable and mobile workers, which, in terms of long term GDP per capita growth and tax revenues, is gold dust.


At present, most of this new activity is based in the South East and London, with the North of England, the South West (excluding Bristol) and Wales lagging behind. A tech revival in Newcastle, Hull or Cornwall would provide much needed confidence and interest in marginalised regions.


In 2010 Tech City, the London IT sector’s industry body was established and this year it was given the remit to represent and assist tech start ups across the UK.


Among their initiatives is a project designed to help young entrepreneurs between 18-25 set up their own digital businesses, as well as advice on how existing businesses can grow and develop.


If the predictions are correct and Britain is able to compete in the tech sector in the next few decades then it’s probably wrong to think of it as a tech boom, which conjures up images of unsustainable growth resulting in collapse.


Instead, Britain’s economy appears to be shifting naturally into a high technology future, the question for individual investors and readers of this blog is whether or not to have anything to do with it?


It’s always worth considering Warren Buffett’s sage advice here, (paraphrased) ‘if you don’t know how it works, leave it alone.’


Or find out. Before you consider risking your shirt and backing the next Facebook (and you will quickly learn that everyone has the next Facebook), it might be worth consulting an independent financial advisor who knows the field.


It is possible for you to learn about the new tech industry, but even pundits who are immersed in it on a day to day basis have no idea what will work and what won’t.


If you do invest in technology, take a long term approach, don’t put in more than you can afford to lose and have it as but one facet of a wider investment portfolio.

How much tax should you pay? Finding the ‘Goldilocks’ rate.

How much tax should you pay_Once, long ago, the job of a rock star was to throw TV sets out of windows, drive Rolls Royce’s into swimming pools and shock, outrage and appall polite society.

Back in the 1970s, when the top rates of tax were levied for millionaire entertainers like the Beatles, the Rolling Stones and Eric Clapton, they either moved to LA or they paid their bills.

These days, our highest paid musicians and performers seem to have abandoned their wild man antics to live a quiet, but less financially transparent existence.

The case of Take That recently where three of the group invested £66 million between them in a scheme that acted as a tax shelter (in itself not an illegal act), has raised all sorts of ethical and financial ques-tions among the rest of the tax paying population.

Even though the scheme was legal, the size of the avoidance has left the HMRC hot on Take That’s tails, demanding repayment of the taxable amount.

Many might ask, if the law doesn’t prohibit the avoidance of tax, why should we complain about Barlow and Co? Good question.

It helps to imagine the tax paying population as slaves in a Roman trireme, rowing to the beat of the HMRC drum, and when one particularly wealthy slave decides he wants a break from rowing, the poorer ones all have to row that bit harder.

Taxes have to be paid, it is quite literally the financial price for existing in a civilized society, and for liber-tarians who think the state should levy no taxes on the people, it might be worth taking a trip to a war torn and impoverished part of the world where there is no state, health care or policemen to see how that one really plays out.

Now, this article isn’t simply to make the case for tax-and-spend, it is, after all, in a personal finance blog. If we want to pay a fair amount of tax and contribute to society, but don’t want to be completely impover-ished by HMRC, what is the best thing to do?

Firstly, get some advice. An independent financial advisor will be able to explore your circumstances, your saving and investment goals and your plans for the future. They will also be able to suggest finan-cial products that will help you to become more tax efficient.

An advisor can help you to find what I call the ‘Goldilocks’ solution that’s just right for you, where you don’t pay too much and you don’t avoid too much either.

Again, limiting your tax liability within the law is perfectly ok, but the more ‘adventurous’ the scheme, the higher the chance that the tax man will look at it and decide to act against it.

Most reputable advisors will steer their clients to low risk investments that have no legal or ethical impli-cations, and if you get advice from any source, be telling you about a scheme that sounds too good to be true, then it’s too good to be true.

Consider walking away quickly from such schemes because at best, they will land you with a nasty tax bill, and at worst they are simply scams and you will lose the money you invest.

The kind of dubious wheezes that Take That were involved in ultimately don’t make good financial sense, as we have seen, the greedier the scheme, the higher the certainty that HMRC will claw it back.

It makes sense to try to limit your tax liability but within some kind of reason, but ultimately where you draw the line is your decision.




The Truth About Statistics



Statistics Blog 2There’s a lot of cynicism about statistics and some of it is entirely understandable.  Whenever there is any sort of controversial debate both sides will inevitably trot out statistics to support their viewpoint.  Even the same set of statistics can be interpreted in different ways by different people.  Statistics, by their nature are generalizations, whereas we as humans often find it easier to grasp specific examples.  We can be told a fact about a certain percentage of the population, but it only becomes meaningful when we see people who put a human face to the statistic.  With that in mind, let’s look at some of the statistics about income protection in the UK and see what they really mean.


The size of the industry is massive compared to the size of the population


At December 2010 there were estimated to be just below 7 billion people in the world of whom around 61 million lived in the UK.  That means the UK is home to just below 1% of the world’s population but its insurance industry is the 3rd biggest in the world.  In 2012 the number of term, life, and other protection policies active in the UK was estimated to be around 29 million, and these have paid out almost £200 billion in claims and benefits.  Insurance companies employed over 300,000 people and paid over £10 billion more in taxes.


Insurance companies are more than twice as likely to pay out as people think


Many people may be pleasantly surprised when they come to make a claim on their insurance.  The public think that fewer than 40% of claims are successful whereas the reality is that over 90% are.  These claims cover everything from cars and homes to pets with over a £1 million a year being paid out on cats and dogs alone.  In terms of human health, 60% of successful income protection claims relate to disorders which would be outside the scope of critical illness cover.

You may have more control over your premiums than you think


A recent study found that a third of people who were without income protection insurance felt that it was too expensive for them.  This is in spite of the fact that 20% of people will be off work for more than three months for health reasons at some point in their lives.  While protecting against potential threats always comes second to being able to pay your bills in the here and now, there are simple ways to reduce the cost of income protection insurance.  Income protection insurers are increasingly moving to offer lower premiums to people who take care of themselves – and the savings made by moving to a healthier lifestyle (e.g. giving up smoking and reducing alcohol) can be put towards these premiums.


Young people can get sick too.


Children have an absolutely incredible ability to repair themselves after cuts and bruises, and even broken bones.  A small percentage of them, however, do get seriously ill.  Worryingly, 66% of families do not have a financial plan in place to manage a child’s illness if it meant they had to give up work to assist with their care.  Approximately two thirds of people with critical illness cover for themselves do know whether or not their policy also covers their children.  Many policies do actually provide some level of cover for minor children.  While this may be the healthiest period of a person’s life, young adults can be afflicted with critical illnesses and therefore their financial needs should ideally be assessed on the same basis as those of more mature years.

America’s Winter Blues


Friday's BlogAmerican Independence Day is an opportunity in the United States to reflect on the country’s current challenges and to celebrate its successes.


This year, whilst the economic news may have recently been encouraging, there are dark clouds on the horizon and they may have implications for Britain too.


In both Britain and America, the last five years of financial austerity has seen a great deal of economic pain for the squeezed middle and the working poor.


The boom of the late 1990’s and 2000s created huge debts and deficits that needed to be repaid and massive distortions in housing and financial markets which we are still feeling the after effects of now.


One of the encouraging things to emerge from all this economic hardship has been record growth from 2012 onwards on both sides of the Atlantic, giving rise to hopes that in Britain and America, our two heavily interlinked economies were both turning a corner.


These hopes might be premature in America’s case; in the first quarter of 2014 US GDP actually shrank, despite the 4.1 percent increase in output in the last quarter of 2013. Some onlookers have blamed the extremely harsh winter that America endured at the end of 2013, causing a downturn in consumer spending and an increased caution in US businesses in investment.


The old adage that when America sneezes, the rest of the world catches a cold is to some extent true, but to extend the analogy to breaking point, it really does depend on the health of other countries in the first place. The winter chills that have brought on America’s sneezing might not yet lead to a world pandemic.


Any downturn in the US, however temporary, will obviously impact on British exports to America and the relative value of the pound, but the economic ‘pain’ that the British economy has gone through in the last five years should have left it better able to weather financial shocks.


In the past five years Britain has undergone an enormous structural adjustment in her labor market, a reduced state sector and a surge in unemployment have been addressed (for better or worse) by a huge increase in freelance and zero hours employment.


Not all of these new jobs involve stacking the shelves in ASDA, and the fact that representatives of the new booming digital industries were recently invited to Buckingham Palace to meet the Queen gives a clue as to their new importance to Britain.


If there is any short term transmission of America’s problems it is unlikely to affect the British economy directly, but that does not mean that UK investors have no reason to be cautious.


In the short term, it is worth looking at the funds, shares and bonds you might hold in an investment portfolio to see what is directly issued by or related to the US economy.


If your fund has invested in US property, for example, or owns a portion of government debt, or is involved in higher risk ventures such as technology then it is worth considering in the next six months how much risk you wish to be exposed to.


All pundits seem to agree that the downturn is likely to be relatively short term and will correct itself later in the year, so if you are investing for the long haul (as most prudent investors tend to be), then it might be worth allowing your portfolio to take a temporary hit and to focus on the next quarter’s figures.

Our Top Ten Ideas For Remortgaging

re-mort planningRemortgaging has become much more challenging and complex in the last few months due to new Government regulations that stipulate that borrowers must not be allowed to take on more debt than they can afford. This means that remortgage deals will only go to borrowers who can prove their financial well being and lenders will want a full audit of your incomings and outgoings. Here is a quick list of our top ten ideas to help you get the home loan you need.

1. Organise Your Finances
If you take an organised approach to your personal finances, reviewing your mortgage deal once every three to five years and then planning any possible remortgage in a systematic way, it will be financially rewarding. Often, the difference between people with a comfortable standard of living and those without isn’t so much their salary as the ability to organise financially.
2. When In Doubt, Ask…
It goes without saying that when we are dealing with personal financial decisions of the magnitude of a mortgage or remortgage, one should always ask for advice. There is a wide array of products and rates on the market at any one time and the sheer level of choice can be overwhelming. There are also countless web pages full of free and for the most part reliable and impartial advice, and if this isn’t enough, you can always pay for a session with a mortgage qualified independent financial advisor.
3. Know Your Loan
Before you start the process of remortgaging, look at your existing deal. Are there any hidden pitfalls, early repayment or exit fees? Finding this out will give you a clue as to how expensive the whole transaction will be ultimately.
4. Look For Hidden Costs
There is no point in switching to a mortgage that you hope will save you money in the long run if the fees, charges and other costs actually wind up forcing you to spend more. Make sure you know exactly how much the remortgage will really cost you before you accept the deal.
5. You Might Be On First Name Terms, But Don’t Be Fooled…
Whilst you lender might pour you a coffee when you have a consultation, or seem friendly and nice, remember that they work for the lender and the lender takes care of itself. Similarly, if there are extras and benefits in the deal, rate caps, cash back offers and the like, be certain that the lender will have already included a way to claw back the money later on with interest. This isn’t to say that you should reject any benefits, just know them for what they are.
6. Look For Remortgage Packages

You might find that there are specific mortgage offers tailored to you. The majority of offers apply to anyone who hits the eligibility criteria for a mortgage, but there are some packages that are specifically designed for borrowers in your circumstances and they might be more flexible or cheaper in the long run.
7. We All Love Our Homes But…
If you over inflate the price or the perceived value of your home, you are bound to be disappointed sooner or later. Lenders will lend based on what they think the property will sell for, not what you would like it to sell for.
8. Your Credit Score Is As Important As Your Property Value
Credit checks are an inevitable part of life in the 21st Century. We are now living in a time when our entire financial history can be purchased and examined. With this in mind it’s important to make sure you know exactly what has been written about you before the lender does. You can get your credit score from Equifax, Experian and Call Credit, along with advice about how to improve your score.
9. Get Your ID In Order
Your lender will want to see that you are who you say you are (countless frauds are attempted every single day) and that you actually own the property you are hoping to remortgage. If you have your proof of ID, utility bills, deeds to the property and Council Tax bill organised before you even get started, you will save yourself stress in the future.
10. Get Insured
Lenders look favorably on the insured. If your mortgage is protected against untimely death, long term illness, redundancy and other unforeseen problems, you will make yourself a less risky prospect in the eyes of lenders


Fund supermarket price wars

Fund Supermarket Blog ImageThese are trying times for supermarkets, be they the conventional kind or simply online invest-ment sites.


In the first instance Morrison’s, Tesco and M&S have all posted profit alerts and seen significant declines in sales, indicating that customers are becoming ever more selective and refusing to hand over money out of a sense of loyalty alone.


This is market economics at its best; supermarkets will inevitably respond to spending signals and innovate, offering new and more attractive goods and services.


The same process is occurring in the way in which we invest in funds using funds supermarkets, which have recently seen fees tumble for everyday investors.


In decades past when an investor wanted to place their savings in an investment fund or spread their nest egg across several funds often paid a large commission to a fund manager or a bro-ker.


In most instances it is hard to see exactly what investors get in return for these fees, with man-aged funds on average failing to out perform, or even worse, under performing compared to other investment vehicles.


A fund supermarket is a platform, normally online, that allows the investor to place their money in a range of funds.


The investor can use one account and invest in dozens of funds, keeping their own personal funds in an ISA or other tax efficient savings account.


The fund supermarket is also where fund managers or brokers also go to find funds to invest in, and previously they were able to arrange their own charges with the supermarket.

The costs of fund supermarkets have fallen recently due to new government rules forcing them to make their charges clearer.


Typically, a charge of about 1.5 percent (working out at £300 per £20,000 investment) was be-ing levied, which over the course of the life of an investment can work out at some considerable costs.


Since transparency has been introduced to the industry fund supermarkets are being forced to offer increasingly more attractive deals with the major players having to offer reduced invest-ment charges on scores of funds.


Knowledge in the investment world is always empowering and the customer has made the in-dustry have to work a lot harder.


At present it is estimated that nearly £150 billion is tied up in UK investment funds, so the over-all savings to the ordinary investor are going to be enormous.


The new generation of low cost funds that are coming on to the market offer the prospect of cheaper investment in the foreseeable future, which, in these still austere times is welcome news.


The laws surrounding financial advice and selling prohibit me here from making any kinds of suggestions or even discussing the benefits and features of individual products, I am a financial blogger, not an advisor.


That said, the only real suggestion I can give is to take some independent financial advice be-fore you invest, the cost of an advisor’s time will be far less in the short run than the price of an over priced fund (they are still out there, by the way, waiting to ensnare the unwary investor).


With more transparency comes more data so the range of options open to someone looking to buy into a fund can be quite dizzying; this is why it pays to get professional advice in order to take advantage of changes that have been set up to benefit you.