Getting Investment Advice

It is not often that any man can have so much knowledge of another, as is necessary to make instruction useful. Samuel Johnson

Growing wealth and deliberate government policy are encouraging even small investors to take a more active approach to saving and investing, and to consider a wider range of investments. Even those who count their savings in hundreds rather than thousands are tempted by high-profile media campaigns to buy shares in privatisation issues, such as British Telecom and British Gas. More than 20 per cent of the population are now shareholders; 65 per cent of households have mortgages to help them buy their homes; 80 per cent of households have some sort of insurance policy, many of which are investment-type plans. The new legislation enabling employees to opt out of their company pension scheme and seek the best terms in the wider marketplace brings yet more people into the investment field.

There is a need for a greater awareness of personal financial planning. The wrong choice of investments can cost you thousands of pounds, not just in missed opportunities for a better return elsewhere, but possibly even losing your original savings if, say, a company collapses. So it is essential to understand something of the choices open to you and to pick the right person if you need financial advice.

Being your own investment adviser

To manage your own investment affairs successfully, whether they are simple or complex, can be hard work. You need to learn enough about tax, insurance, pensions and investments to enable you to work out your needs and then match them to appropriate financial products. You'll then need to keep abreast of changes which might affect your financial decisions. You'll need some good basic and unbiased books to cover the groundwork, and you should diligently read the personal finance columns in the press, follow the financial programmes on radio and television, and study the leaflets and documents issued by financial institutions to describe their products. You could perhaps subscribe to one or two specialist money magazines to help narrow down your choices from the vast range of products and companies available. Few people have enough time to tackle their finances properly, so a professional financial adviser could be the answer.

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Unit-linked Life Insurance

Where from? Life insurance companies, life insurance brokers and other investment advisers.

How they work Depends on the type of plan. The structure of the plans is the same as for with-profits policies ), but instead of earning bonuses, your money is used to buy units in one or more investment funds - rather like a unit trust (see above). The price of the units reflects the value of the underlying investments and can go down as well as up. Different funds specialise in different investment areas and you can usually switch part or all of your money from one fund to another (though there... see: Unit-linked Life Insurance

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