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International Women’s Day

by abacusadvisers | Mar 8, 2022 | Conversations, Planning, Social Media

Women Make Great Investors, So Let’s Invest More

MARCH, 2022

Investing
IWD

It’s official: women are better investors than men. They just don’t think they are. In fact, a 2017 study from Fidelity Investments1 shows that just 9 per cent of women believed that statement. But that same study also analysed returns on investments by both men and women – and found that the women earned 0.4 per cent higher on their investments than the men. That figure might look small but it represents a whole lot of added value over time.

That study isn’t the only one, either. There’s a whole body of research2 which shows that women tend to make better financial decisions around investing. They’re more objective, they are less impulsive and they hold more diverse portfolios. As Fidelity’s senior vice president of women investors Alexandra Taussig said: “Women need to lean in and own the fact that they’re better investors and celebrate that.”

Bust the myths

So why don’t women celebrate our financial abilities more? Sadly, it’s hardly surprising that womens’ confidence is taking a while to grow. After all, as recently as the 1970s, many were routinely refused3 mortgages, loans, and credit cards.

Consequently, a disempowering myth grew up that women couldn’t manage money. A study by Merrill Lynch and Age Wave4 found that just 52% of women say they feel confident managing their investments, compared to 68% of men. Yet over a third of women in that study said they wished they had invested more of their money.

Be the change you want to see

But there’s good news: it’s the 21st century and the male-dominated world of investing is changing fast – and changing for the better. Last year, for example, saw the biggest-ever rise in the percentage of female fund managers. The number of mixed-gender portfolio management teams has doubled over the last six years – and these teams perform best in all markets on risk return. As the Citywire Alpha Female report5 points out, that shatters the myth that women prefer not to take risks in investing.

Women’s increased visibility in the professional fund management space matters, because it’s helping to boost confidence among women who want to manage their own investments.

And those investments are now more accessible than ever.

There’s still a way to go, but the investment landscape is finally changing to cater more for female investors. Tech is democratising investment strategies, information and processes: the dusty office and disapproving bank manager have long been consigned to history.

“It’s time to take control of your finances and realise just how much power you have in the investment space.”

Make a difference

Financial products are changing too, as the world changes and investor priorities change with it. Evidence shows that women are more likely to seek out sustainable investing. They care more about where their money goes, and they want to see that it’s making a real difference. As a recent RBC Wealth Management6 study of its US clients commented: “Female clients… are more likely to prioritise environmental, social and governance (ESG) impact when considering what companies or funds to invest in, while male clients are much more likely to prioritise financial performance.”

Just do it

And you no longer need hundreds of thousands to make investing worth it. In the 21st century, it’s for everybody, no matter how much money you have. So, if you’ve been considering taking your first steps into investment, it’s a great time to join the millions of women who are already doing it. It’s time to take control of your finances and realise just how much power you have in the investment space. After all, your financial decisions could literally change the world.

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This Blog is published and provided for informational purposes only. The information in the Blog constitutes the author’s own opinions. None of the information contained in the Blog constitutes a recommendation that any particular investment strategy is suitable for any specific person.

The importance of financial advice

by abacusadvisers | Jan 11, 2022 | Conversations, Education, General Investing, Retirement

THE IMPORTANCE OF FINANCIAL ADVICE

January, 2022

There’s nothing like the start of a brand new year to focus your mind on sorting out your finances.

Dealing with household bills and monthly outgoings is do-able, if a little time-consuming. But going it alone when it comes to your wider finances can be daunting. Properly managing investments and making the right financial decisions takes time, effort – and skill. Ideally, you’ll take advice from a professional.

You might want help with managing your savings and investments more tax efficiently or simply want to plan for the longer term.

Being tax efficient for some is just a case of using the annual ISA allowance. But for those with higher levels of wealth and more complex affairs, an adviser can explore some of the lesser-known tax breaks and allowances.

Your adviser will help you manage your assets in a way that gives you the best possible chance of achieving your financial goals, matching your portfolio choices to your own attitude to risk.

If you’re happy to choose your own investments you might not feel the need to take advice. Indeed, there are many people who consider themselves investment experts and choose to fly solo.

An adviser could be your best asset

Yet an adviser can be your best asset. The fee you pay will get things in place to build your wealth, protect your family, plan for a comfortable retirement, ensure your plans are on track, as well as peace of mind your money is working as hard as possible.

Quantifying the value of financial advice is not an exact science, but there has been research that shows people who take advice are better off after 10 years than people who weren’t taking any advice, for example.

Receiving professional financial advice between 2001 and 2006 resulted in a total boost to wealth (in pensions and financial assets) of £47,706 in 2014/16[1].

Non-affluent investors saw their wealth boosted by an impressive 35% by taking advice with a 24% uplift to their pension wealth. Affluent investors saw their wealth bolstered by 24% and their pension boosted by 11% if they took advice.

“It’s not just the start of a new calendar year that can prompt the need to speak to an adviser.”

Benefits of an adviser

One key benefit of speaking to a financial adviser is their ability to scour the market for the most appropriate investment or tax solution for you.

Banks often advertise services for help on finances, but this is not comparable with advice from the likes of Tavistock, because a bank will typically only be able to offer products from its own offering, which is extremely limiting and runs the risk of missing out on a more appropriate solution. Plus, the ‘information’ or guidance offered won’t necessarily follow any assessment on whether a specific product is suitable for your needs. It is likely to be more of a signpost of what’s available.

It’s not just the start of a new calendar year that can prompt the need to speak to an adviser.

Life events such as getting married, having a baby, buying a home or getting divorced often provide common triggers for seeking the help of a professional. Many people might simply decide it’s time to talk to an expert if they no longer have the time to manage everything themselves.

Some people might worry about the cost of the services advisers provide. However, the research mentioned already illustrates the benefits of advice – financial advice is an investment in itself.

Plus, advisers must be clear upfront about what their fees are and agree with you in advance how you’ll pay them, so you should never be in any doubt what it will cost you.

Professional advice is about more than just investment returns; it’s about knowing and understanding an individual’s goals, to ensure advice provided is tailored and offers the best possible chance of achieving those financial goals.

In conclusion

Speaking to a trusted, established firm of advisers should achieve that all-important peace of mind that you’re in safe hands.

Download our why you use an adviser brochure here.

Source:

[1] https://ilcuk.org.uk/financial-advice-provides-47k-wealth-uplift-in-decade/

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COVID and The Saving Habit

by Alice Bristowe | Jan 25, 2021 | Conversations, General Investing, Planning, Social Media

COVID AND THE SAVING HABIT

JANUARY, 2021

Savings
Financial Markets

For the most part of a year now, we have been on “lockdown”; staying at home in a bid to help reduce the spread of coronavirus and to protect the vital NHS.

As well as these obvious positives, staying at home has also had a huge effect on our finances and our relationship with them. Of course, a huge number of people have felt, and continue to feel, the devastating impact of the pandemic as they simply battle to keep themselves and their businesses afloat on little to no funding or income. For those who have been fortunate enough to maintain a steady income stream during this time, staying at home may have led to increased saving.

The combination of falling household spending and possible future financial concern has, in some instances, created a greater willingness to save money.

When the pandemic began, we mentioned that around 12 million adults do not have any form of saving or investing account*, while almost half of people who do save £100 or less a month. Almost a quarter of people have no savings at all*. This may in some places, still be the case, however, it seems that some have adopted savings habits throughout the pandemic that they are keen to continue. (1)

The closure of leisure, hospitality and retail sectors is limiting recreational spending, and leaving some households with an increase in spare disposable income. This is turn has created a “savings buffer”, helping individuals and households feel protected of the risk of another economic downturn.

Currently, the want for greater visibility of finances and savings is bigger than ever. Potentially, many savers feel this will ensure a quicker route to protecting themselves against any future shocks the pandemic may bring. (2)

As a knock on, the interest in big returns on savings has dropped, with many simply looking for increased engagement with their finances. Therefore, a more cautious and flexible approach to saving and choosing where to place any savings or investments, seems to have been adopted. (3)

It is key especially in unsettled market periods, to set clear and achievable financial goals.

If unfortunately, you are someone whose income has been affected by enforced time off, you may still be able to take steps to potentially make it easier to save once this has passed.

is key especially in unsettled market periods, to set clear and achievable financial goals. Reviewing expenditure and income will help give an idea of spending and saving habits and allow you to build a plan on how to save more without negatively impacting your living standards.

It also helps, if possible, to look further than tomorrow and to set some long-term financial goals. Do you have a retirement fund started? Are you able to start contributing to that monthly? If you can, accessing regulated professional financial advice will provide you with expert guidance to confidently plan your financial future.

If you are in a fortunate position where your income has not yet changed and you have noticed your spending reduce during this period of social distancing, maybe it’s time to start considering investing, and getting that money to work for your future.

We are incredibly aware that financially, this is a tough time for many and we want to be able to support as best we can. We hope you are all staying safe.

Source data:
[1] Research of 2,000 UK consumers conducted on behalf of Aviva by Censuswide, August 2020. Censuswide is a member of ESOMAR – a global association and voice of the data, research and insights industry. Censuswide comply with the MRS code of conduct based on the ESOMAR principles.

[2] https://www.bankofengland.co.uk/statistics/tables – Table A4.1

[3] https://www.bankofengland.co.uk/statistics/tables – Table A5.6

PROVIDING NEWS AND VIEWS TO SUIT ALL NEEDS

The importance of financial advice

THE IMPORTANCE OF FINANCIAL ADVICE

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