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The investment services
industry is a confusing world these days and there
are many pitfalls for you and your wallet.
Even the most down to earth and
sceptical person can be made to look silly when stepping
into the maze of investment industry. Faced with endless
false turnings, hidden obstacles and mis-leading signposts
from advertisements to advisors, it is likely once
will only come back poorer, a bit confused and a big
headache!
Many of us consider investing our money from time
to time which is hard earned but only to see it eroded
away years later when things get from bad to worse
in the investment industry. Since most of us are not
experts in this financial maze, we are left with Independent
advisors to guide us through. The last issue pointed
out how to put your IFA on the hot spot by asking
a few simple but pertinent questions in order to make
a decision of choosing a well qualified IFA.
But many of us are fooled still,
and sometimes by the adverts we see on TV, or in Newspapers
or magazines. Some ads will boast of a fund’s
strong performance or predict future returns with
their claims highly prominent and eye catching. Hidden
away might be a warning that returns are in fact not
guaranteed and on a closer inspection, the figures
might have been cherry picked from a fruitful time
period not reflecting the true long term performance.
The FSA are clamping down on such
advertisements and insisting on companies paint a
reasonably balanced picture of the product being advertised.
So do look again –in short never rely on what
is designed to catch your eye to make an investment
decision. A step from the basic advert are guides
and supplements which drop out of newspapers or magazine
inserts and should always be treated as a pinch of
salt as they include comments of certain high profile
financial advisors based on opinions.
But opinions are just that which in some cases carry
a greater authority than others, but however articulate
or qualified speakers or writer, their share tips,
market forecasts can be wrong. After all, why are
here so many of them and how often do they agree with
each other?
So if your stockbroker or favourite media tipster
suggests a share of a company ask how much research
has been done or is the recommendation based on an
opinion and analysis that has trickled down from an
analyst close to the management of the company or
publication?
Once you have finally decided to
invest your money –you must think about if you
want income or capital from that investment and examine
the investment policy of the fund in question. It
is advisable to buy a fund that suits your needs rather
than following the latest fashion. Again here, you
might need an IFA to evaluate your requirements and
give you an informed opinion and guide you to make
a sound investment decision.
You can refer to the previous edition or
log on to
http://www.perfect-partner.com
and browse the articles under the Money Matters section.
Useful Contacts
Financial Services Authority
www.fsa.gov.uk
Financial Ombudsman Service
www.financial-ombudsman.org.uk
Association of Investment Trust Companies
www.itsonline.co.uk
Investment Management Association
www.investmentuk.org
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