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Financial Options Newsletter | Winter Edition
Contents 2 Why do financial advisers bang on about protection? 2 Common investment mistakes & how to avoid them 2 Mortgage Rates 10 year fixed deals available again!! 3 Ethical investing need not mean sacrificing investment returns 3 Why Cash Flow Planning is true financial planning... 3 Another appointee to strengthen the Investment Team - Rosy Craine
Welcome to the combined Chase Wealth Solutions and Financial Options Newsletter We trust you find the newsletter helpful and informative, but should you wish to find out more on the topics covered then please feel free to visit us on the internet, give us a call or even drop in to our offices on Prospect Hill. Chase Wealth Solutions and Financial Options can provide advice and assistance for all your financial matters. We have a dedicated team on hand to ensure that each customer’s individual requirements are met to the highest of standards.
4 Supporting the Community 4 Future Events for your diary
Fed up with low returns on your cash/savings and investments Drop in or call us today on 640350 to see the options we can offer...
Chase Wealth Solutions welcome Prudential to the Island For the past 4 years we have been promoting the Prudential PruFund. We see this as an excellent product for investors who seek an investment which provides a consistently good and low volatility return. In fact over the past 4 years* the PruFund Cautious fund has produced a gross compounded annual return of 8.1 % and the PruFund Growth fund has produced 9.3%, which of course is far and away above bank deposit rates. * Prufund Factsheets 31/10/10 – 31/10/14
Since many of our clients have invested in the PruFund funds we would like to invite them and also any prospective investors to a free, no obligation joint presentation, where Prudential will explain how they manage investors’ money in the PruFunds. The presentations will be held in Douglas on the 9th and 10th of February at the following times: Monday 9th February 2pm and 6pm Tuesday 10th February 2pm and 6pm
If you would like to attend one of these presentations to see how your investments are or could be managed, then please call us on 640350 or email us at solutions@chasewealth.im. Please let us know your preferred day and time so that we can register you for one of the presentations. All presentations are free to attend, but places will be limited so please register with us as soon as possible so we can keep a place for you. Please feel free to invite any friends or family that may be interested as well.
10-12 Prospect Hill, Douglas, Isle of Man, IM1 1EJ
Why do financial advisers bang on about protection? Protection as we know it includes all forms of insurance, not the least of which is Life Cover and Critical Illness Cover. Often overlooked, but nevertheless vitally important is Income Protection, the subject of this article. We happily buy Life Assurance to cover our families, Buildings and Contents Cover – it’s compulsory if you have a mortgage; Motor Insurance – it’s the law of the land and even Pet Insurance – simply because we love them! However, few have Income Protection Cover, the very thing that is designed to maintain our lifestyle even at a basic level, the ability to continue to feed and clothe ourselves and our families. As a result, a worryingly large proportion of us have no provision for loss of income because of illness! Some people rely on their employer to stand by them when illness strikes. You may be lucky and get paid for the first three, six or twelve months of your incapacity. Other than this, Statutory Sick Pay (SSP) is the only payment which your employer is obligated to pay and SSP is little more than subsistence level. And if you are self-employed, you have absolutely no financial help whatsoever. Neither Critical Illness Cover, nor of course Life Cover, replaces income protection. Critical Illness Cover is of no use to the taxi driver who breaks an ankle and is off the road for six weeks or the builder waiting for a hip replacement. The answer to the question in the title of this article is that the argument for Income Protection Cover is compelling and every working person should consider the need for one. For a no obligation quotation to see how cheap it can be to fully protect your family please contact Dominika, Mike or Paul and they will provide you with a range of options to suit your family circumstances and your budget. Please call them on 612611 or e-mail them at: advice@financialoptions.co.im
Common investment mistakes & how to avoid them Investing isn’t easy. When the average investor makes investments it is often a leap of faith, sometimes based on sound research, sometimes on a whim, without a clear idea how long an investment fits into an overall plan, an investment portfolio or over a timeline. Even here we get queasy when markets fall dramatically and very happy when we see our clients’ portfolios rise in value. Investing is therefore as much about emotion as it is about the rational. This often leads to costly investing mistakes: Buying High and selling low Euphoria when markets rise (buying more and/or failing to sell) and Panic when markets fall (selling to avoid further perceived losses).
Mortgage Rates 10 year fixed deals available again!! For the last few years normality in the mortgage market has meant Island lenders have been offering both fixed and variable rates for 2, 3 and sometimes even 5 years. Those seeking the security of a long term fixed mortgage rate have been sadly disappointed. Now one local lender has started offering 10 year fixed rates again. Traditionally most of the lenders used to offer these deals pre-credit crunch, so this is a clear indication that we are getting back to lending attitudes that existed before 2008.
Should you snap up this opportunity?
Building an unbalanced portfolio Buying investments one at a time rather than considering the impact on the overall portfolio, which may result in higher risk than a planned portfolio. Underestimating the time horizon over which they are likely to invest We are often told (especially by the more elderly) that they do not want to “tie their money up”. The reality is that often there is no immediate need for the investment to be realised and often the money will be left in an inheritance. The result is a series of low-return short term investments as opposed to a longer term one which has the potential to yield far greater returns. Emotional attachment to certain investments Perhaps because they have been inherited or they have fallen in value so much “they cannot fall any further”. Investing in poorly performing assets or failure to diversify adds significantly to financial dissatisfaction and portfolio risk. Buying and selling too frequently Often a result again of euphoria and panic. The emotion “need to do something” can be counteractive and may result in excessive trading costs. Possibly - If you feel a 10 year option, which guarantees the monthly payments throughout the term gives you comfort should interest rates rise substantially in the future. This may especially be the case if there are no plans to move house and a longer-term mortgage also avoids the potential need to pay a fee every couple of years when renegotiating a shorter term deal. Possibly not – You may find fixing a mortgage for 10 years very restrictive if you want to move house within the fixed period, or pay off a significant lump sum. This may mean a large penalty or being forced to stick with the same lender, even if better deals may be available elsewhere. Of course it comes down to your personal circumstances. If a ten year rate may suit you, or whatever your mortgage requirements are, Paul, Dominika or Mike in the mortgage team would be pleased to hear from you.
Ethical investing need not mean sacrificing investment returns Chase Wealth has launched four new ethical portfolios which comprise mixes of equities, fixed interest securities and commercial property. Ethical Investing, or as is sometimes ■■ Available for regular savings and known as Socially Responsible lump sum investments Investing looks to invest in companies ■■ Monies can normally be withdrawn on the basis of their social, penalty free with 10 days notice environmental and ethical principles. ■■ We provide monthly valuations The performance of each portfolio for clients has been excellent, offering an ethical * Performance to 31 December 2014 investment solution which meets assuming the investments were made varying attitudes to risk. on 31 December 2011 into the funds in proportion to the model allocations.
A graph of 3 year performance* versus volatility is below:
Average Annual Growth over 3 years (%)
14 Balanced Cautious Growth
12 11 10 3.5
Cautious 4.0
4.5
5.0
5.5
6.0
6.5
7.0
■■ If your retirement plans will meet your financial needs? ■■ If you’ll be able to leave an inheritance for your children? ■■ How much you need to save for your Children’s education?
Cash Flow Planning provides a complete understanding of your financial position and what might happen in any circumstances. Bringing together the expertise of all our specialists (Investments, Pensions, Mortgages, Protection) we can put together a complete and holistic plan for you to take away and which we can review every year or should your circumstances change.
Balanced Growth
13
Have you ever wondered?
■■ How much protection (Insurance) you need for your family?
Chase Tailored Ethical Portfolios Performance & Volatility 15
Why Cash Flow Planning is true financial planning...
7.5
To find out more about the Ethical Investment portfolios we provide why not call us on 640350 or visit our website at: www.chasewealth.im/ethical-investing.
If you’d like to know the answers to these and many other questions about your future finances then we strongly recommend you consider Cash Flow Planning. Just visit us at www.chasewealth. im/cash-flow-planning to learn more about true financial planning.
Another appointee to strengthen the Investment Team - Rosy Craine Well known road and fell runner, Rosy Craine, joined Chase Financial Services in Spring 2014 to provide part-time administration support whilst working as a risk analyst for one of the island’s leading Financial Services providers. With further business expansion Rosy has been appointed to work permanently alongside our Investment and Pension Specialists as the Investment Co-ordinator.
Rosy brings with her a wealth of experience gained from working within the Financial Services Sector since 1996 and her appointment will further enhance the services already provided to our clients.
Just around the corner...
Supporting the Community Future Events for your diary
Going forward this year we are planning to have a stand at both the Royal and Southern show with a truly interactive Angry Birds style fund raiser, Paul is definitely intending to get into his trainers this time for the Great North Run 2015 and we will be holding another Coffee Morning in November. The team are always trying to find new ways to raise as much as possible for our selected charities, so if you know of an event that you think we may like to get involved with please just let us know.
Crossroads Care Halloween Spooktacular Santa Dash Financial Options were very well represented again at the Isle of Man Bank Santa Dash held in December with six of our team taking part and our very own Rosy Craine finishing an impressive 3rd out of the women taking part. We were running in aid of Crossroads Care and at the last count had raised over £150.00. Mike has also asked me to mention his also very impressive 13th overall position!!
Chase Wealth Solutions chasewealth.im Tel: +44 (0) 1624 640350 Email: solutions@chasewealth.im
Financial Options
Our much anticipated Halloween event held in association with Crossroads Care at the Curraghs Wildlife Park was a significant success in October. The team from Financial Options dressed up as witches and pumpkins, vampires and evil clowns and offered a range of activities including Ginny the Witch’s hoopla and a very generously supported raffle (with a top prize of a return trip on the Steam Packet for 2 and a car). We assisted Crossroads raise over a £1,000 and were proud to be supporting such a great cause in such a fun way.
Great North Run In our Corporate Team, Elsdon Watson showed what he is truly made of in September this year when he completed the Great North Run in aid of the British Heart Foundation and raised hundreds of pounds in the process.
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Chase Financial Services Limited, trading as Chase Wealth Solutions and Financial Options, is licensed by the Isle of Man Financial Supervision Commission. Chase Financial Services Limited is registered with the Isle of Man Insurance and Pensions Authority in respect of general business.