OUT WITH THE OLD HAT, IN WITH THE NEW…

Decluttering the Investments Cupboard

Spring has sprung and with it comes the annual need for a good decluttering! This has led me to ask the question ‘why don’t people clean out their financial cupboard at the same time’? After all, Spring marks the start of the new tax year – and with it a torrent of new taxes, new rules and maybe even some new investments.

There really is no better time to look at whether your financial plan is up to scratch; or to decide whether your investments are in need of a little of the ‘out with the old hat, in with the new’ treatment. I guess the pressing point is how to decide?

I would suggest keeping it simple! Investing doesn’t have to be complicated – just well thought through. This is where this article comes in. The hope is to show you how just a small tidy up of the way you invest could give you a clearer outlook over your finances.

Please do remember though that this article is not personal advice. The value of an investment, and any income from it, can always go down as well as up. The return at the end of the investment period is never guaranteed and you may get back less than you originally invested. The good news is that if you have any concerns, you can, of course, ask us for advice.

So now we have the obligatory caution (and advert!) sounded, let’s begin!

Putting Your Investments All in One Place…

Pensions

It sounds obvious, but keeping your investment accounts in one place makes it easier to keep track of your savings. Needless to say, it also better facilitates topping up those savings – and just because it’s in one account doesn’t mean that the underlying assets can’t be well diversified to manage risk.

Transferring from one scheme to another though can often seem daunting. The good news is that most advisers will happily handle this process for you. If we have a client wanting to transfer an old pension scheme, for example, they need only arrange a meeting with us. We then do the complicated analysis bit for them and provide advice on the matter.

Tip – It’s best to check you won’t lose any valuable benefits or guarantees (or have any high exit fees!) before transferring. You should also be aware of any disadvantages, such as the fact that pensions are normally transferred as cash. As such, you will miss any market rises or falls for a period.

ISAs

With the start of a new tax year, it’s worth thinking about moving your ISAs to one place too. Irrespective of whether it’s just an old Cash ISA paying peanuts in interest, or an existing Stocks and Shares ISA, simplification is key to monitoring your money in relation to your overall financial plan.

A Stocks and Shares ISA lets you spread your savings across a range of investments (bonds, shares, funds etc.). It also has value in bringing higher returns over the long term, while interest rates on cash ISAs remain low. As investments can go down as well as up, it invariably carries a higher risk than Cash, so you may well get back less than you originally invested. This option really depends on your appetite for risk and your investment horizon – but it’s definitely worth speaking to your adviser about to see whether it’s right for you.

Tip – If you do decide to transfer, please don’t withdraw money from the ISA itself. Instead, transfer it to another provider.  This will enable the funds to stay in their ISA wrapper, meaning that it won’t count towards this year’s allowance! Again, always check for any loss of interest or high exit fees before transferring.

Handling Share Certificates…

It’s almost always worth transferring share certificates to an online account if you have them. Most advisory practises have an online account that will help you keep a better eye on how your investments are doing. These accounts are perfect for any shares you have. So, trying to remember where you left the paper certificates really can be a thing of the past.

There is also the option of putting them in a Fund and Share Account. This allows you to save money and doesn’t carry a dealing fee to put your shares in. Also, when the time comes, the charges are lower to sell online than by phone or through the post!

It’s probably worth adding at this point that from 2025, share certificates are set to become obsolete. The current thinking is that they will be replaced with an electronic holding with a registrar – so getting your shares in order over the next few years really should be on your radar.

If you have any concerns, or doubt, over your shares and how best to handle them, please do feel free to get in touch for some advice.

In summary; consolidation keeps things simple but please do seek advice before you act.

If you would like to discuss anything financial services or accountancy related, please visit our Contact page and a member of our team will be in touch!

 

Written by Chris Page

Chris is an experienced financial service professional who joined the business in 2013, as a result of his hard work and dedication he was made a director of the firm late 2014.