Getting old can bring about so many challenges which schooling and early experience could not train and prepare us sufficiently to eliminate or minimize the pain and loss. Take the case of Max Tharpe, an accomplished photographer, who managed to inherit a large stash of stocks which afforded him a comfortable life in retirement. Having no heirs to pass on his estate, he chose to donate his wealth to charitable church groups when he turned 87. And so, one day he went to the office of Edward Jones & Co. in Fort Lauderdale, Fla. in 2007 for that very purpose.
In February 2008, Mr. Tharpe asked his stockbroker to sell only one position, his Wachovia Bank shares, whose branch had given him such poor service. He also told the broker to maintain all the rest of his portfolio. And this is when the whole thing blew.
Based on the arbitration award handed down by the Financial Industry Regulatory Authority, or Finra, and the narrative account of Todd Zuckerbrod, Mr. Tharpe’s lawyer in the case filed against Edward Jones and its broker, William Holland, the story chronicles the extent to which scammers will go to fleece their clients, even the elderly.
It seems Holland took his sweet time, spending eight months to dispose of 30,464 Wachovia shares in a falling market, while making 81 unauthorized purchases using the sales proceeds. Holland also convinced Tharpe to liquidate a fully-matured insurance policy and to purchase an annuity in which Tharpe paid Holland a fat commission of $49,549.
How could a broker do that to an old man who probably lived a big part of his time visiting or staying in the hospital? An old man who had no way to comprehend, let alone suspect anything wrong with the insurance switch or even with his brokerage account. As he described the testimony at the Finra hearing, Atty. Zuckerbrod stated, “Mr. Tharpe was hardly focused; you could be conversing with him for a few minutes and then, all of a sudden, he would be talking about B-52 bombers flying in the skies.”
This kind of thing can happen to any elderly person – to you or to your parents. You could be 85 or so and still be smart enough to appreciate Warren Buffett’s counsel about index funds. However, two to three years down the road, you could become a sitting duck to clever cons out to cut 20% off your gains who share nothing to cover part of your losses.
Buying investments can seem daunting if you haven’t done it before. Follow our step-by-step guide.
Do you need help?
Have you decided what type of investment you want? Are you reasonably sure of what investment or product features you are looking for? If not, consider going to a financial adviser. The adviser will help you with these choices and with the buying process.
Checklist for buying investments
Are you intending to buy individual shares? You need to use a share dealing service and the cheapest tend to be online. You can find out about different types of service and search for a provider by:
Where to buy investments
Understanding investment fees
Check how you will be able to manage and keep track of your investment. For example, will you be sent regular statements? Will you have an online account? What’s the procedure for cashing in your investment later? How will you and the provider normally communicate – by email, online, phone, post?
Get more informed about investing
A beginner’s guide to scams
High risk investment products
Beware toxic savings and investment products
If you’re looking to invest, buy a financial product or plan for the longer term, whether or not you need financial advice will depend on a number of factors such as what product you are looking for, how complicated your finances and personal circumstances are and your short and long-term goals.
Professional financial advisers carry out a ‘fact find’ where they ask you detailed questions about your circumstances, your goals and how you feel about taking risks with your money. Then they recommend financial products that are suitable and affordable for you.
Types of financial adviser
Financial advisers offer services ranging from general financial planning and investment advice, to more specialist advice, such as the suitability of a particular product such as a pension.
In the case of investment products, some advisers are ‘independent’ – meaning they offer advice on the full range of investment products from the market, while others offer a ‘restricted’ service meaning that the range of products or providers they will look at is limited.
What are the benefits of getting advice?
If you buy based on financial advice and a recommendation, you should get a product that meets your needs and is suitable for your particular circumstances.
Depending on the type of adviser you use, you may also have access to a wider range of choices than you’d be able to assess realistically on your own. You also have more protection if things go wrong if you buy based on advice – see below.
The difference between advice and ‘non-advised’ sales
Many banks, building societies and specialist brokers will talk you through your different options and leave it up to you to decide which product to take. In this case you are buying based on ‘information’ and have fewer rights to claim compensation if the product turns out to be unsuitable.
By contrast, if you end up with an unsuitable product after getting advice and a recommendation you could have a case for ‘mis-selling’ – though this doesn’t protect you against making losses if the market goes up or down.
What do you pay for financial advice?
The rules on fees for financial advice changed from 31 December 2012. If you are looking for general financial planning advice or for advice on buying particular investments you will pay a fee. Advisers must be clear upfront about what their fees are and agree with you in advance how you will pay them.
Before these changes, many financial advisers didn’t charge, but instead received a commission which was deducted from the customer’s initial or ongoing investment payments.
The changes were introduced to help make the cost of financial advice clearer and so that you can be sure the advice you receive will not be influenced by how much the adviser could earn from the investment.
Mortgages and most insurance products are not affected. However, some mortgage brokers may still charge upfront fees for advice, while others receive a flat rate introducer’s fee from the product provider. Receiving mortgage advice directly through your lender is usually free.
Is it cheaper to buy without advice?
You won’t have to pay an advice charge if you go direct. But you should weigh up the cost saving against potentially buying an unsuitable product or one which gives poor returns.
Advice can help you buy a better product than one you choose yourself. An adviser will also have the expertise and knowledge to find better options, as some products are only available if you go through an adviser.
So when do you need financial advice?
The answer partly depends on the product and partly on other factors.
Cash savings products
If you’re looking to put money into savings accounts, cash ISAs or fixed rate savings bonds it’s easy to DIY using comparison sites and tables. Because of the low risk you don’t need to get financial advice and you can buy directly from providers very easily.
If you’re thinking of investing in shares, unit trusts and other investments, you can go DIY but it will be more risky because these products are harder to understand than savings. There’s also a risk that you might lose money or buy a product that’s not suitable for you because you don’t understand it. So you really need to do your homework.
Ask yourself these questions:
If the answer to any of these is ‘No’ then seeking financial advice may be your best option. When trying to decide, also bear in mind the cost of fees against the financial and emotional cost of getting it wrong if you buy without advice.
Insurance or mortgages
Some insurance products and mortgages can be purchased using price comparison websites, or bought directly from suppliers.
However, there are also plenty of specialist brokers who will talk you through a range of options and may be able to get you a better deal. It’s up to you whether you buy with or without advice.
If your employer offers a workplace pension they may also offer you access to advice or provide guidance about joining their scheme. You should take up this offer if available.
If you’re looking to invest in a personal pension, to boost your existing pension or to merge different pots from existing pensions it’s usually best to get advice unless you really understand how these products work.
Pensions are long-term investments so you need to be sure you understand the types of fund you’re investing in, the risks and the suitability for your particular situation.
Find a financial adviser
If you think that financial advice is for you, read our guide below to understand more about independent versus restricted advisers and to link to organizations that will help you find an adviser in your area.
By: Kyle Woodley
U.S. News & World Report ranks the best exchange-traded funds for tech lovers.
Semiconductors, software and IT services.
The heart of the technology sector's earnings season typically brings with it a lot of big swings, even in the bluest of blue-chip tech stocks. But you can avoid the volatility from quarterly tech earnings season by getting some of your exposure in a more well-rounded way: via exchange-traded funds, which let you invest in the sector as a whole, or in specific industries such as Internet companies or semiconductor makers. Here's the top 10 tech ETFs as of this writing, as ranked by U.S. News & World Report.
1. Vanguard Information Technology ETF (VGT)
The dirt-cheap VGT is also a strong performer, beating out the S&P 500 in total returns at 143.46 percent to 136.74 percent since inception in late January 2014, and it's no slouch at $9 billion in assets under management. Still, the XLK has the overall performance advantage, with 148.72 percent gains in that time. VGT is similarly constructed, though telecoms like AT&T and Verizon Communications (VZ) are utterly absent. If you're driven by paying the absolute least for broad tech exposure, you'll want to lean toward VGT.
2. Technology Select Sector SPDR ETF (XLK)
The XLK is the gold standard for tech funds – both the well-recognized and the largest with nearly $14 billion in assets under management. The XLK is a collection of all the tech favorites – Apple, Microsoft and Facebook, though it also features AT&T (T) in its top five holdings. The XLK also is one of the cheapest tech ETFs out there, and it even has a performance edge over the lifetime of the top-ranked fund out there, which we'll look at next.
3. Guggenheim S&P 500 Equal Weight Technology ETF (RYT)
The RYT is, as the name would suggest, an equal-weight fund that invests in the Standard & Poor's 500 index's tech stocks -- 68 blue-chip names. Thanks to the equal weighting methodology, no stock makes up more than 1.7 percent of the holdings. RYT has a heavy bent toward IT services and semiconductors, each at nearly a quarter of the fund. One note with the last of our equal-weighting funds – the methodology provided better diversification, but in the tech sector, not always (or even often) better returns.
4. iShares U.S. Technology (IYW)
The IYW would seem to be pretty spread out given that it has 140 holdings within America's tech sector. However, this fund is extremely concentrated at the top, with the top five companies representing more than half of the IYW's weight. Apple alone is a massive 17 percent of the fund, and Microsoft and Alphabet (GOOG, GOOGL) each take up 12 percent. This is a great fund when all is going well for technology's most blue-chip stocks, but when the chips are down … watch out.
5. iShares Exponential Technologies ET (XT)
The iShares' XT ETF aims to be at the forefront of the tech sector's prevailing trends, using what it calls a "unique evaluation process to identify companies developing and/or leveraging promising technologies." As a result, XT is invested in things such as 3D printing via 3D Systems Corp. (DDD) and Indian IT outsourcing via Wipro (WIT). This is another equal-weighted fund, with no stock making up more than 1 percent of the fund. Nearly 30 percent of the fund is invested in health care technology.
6. iShares North American Tech ETF (IGM)
The IGM is another broad-based tech fund, with this one focusing on roughly 275 North American tech companies. This is a traditional cap-weighted fund, so 30 percent of the fund is concentrated in its top 10 holdings, led by MSFT, AAPL and FB. However, investors are treated to a decent industry spread, with double-digit portions of the fund invested in five areas, including Internet software, storage and semiconductors. Internet retail comes close at nearly 9 percent of the fund.
7. Fidelity MSCI Information Technology Index (FTEC)
The FTEC is a broad-based ETF, focusing on mostly large-capitalization, growth-oriented stocks within the tech sector. Thus, you get consumer-facing hardware companies like Apple, software companies like Microsoft, Internet companies like Facebook (FB) and even payment tech companies such as Visa (V). While the FTEC is diversified in that it holds nearly 400 companies, this still is a top-heavy fund, with the top five companies weighted at nearly 45 percent, including a 13 percent-plus weighting for Apple – a common theme among many big tech ETFs
8. Market Vectors Semiconductor ETF (SMH)
The SMH also invests in the tech sector's semiconductor subsection. This is a very niche ETF of just 26 holdings currently, all involved in the production or other aspects of the chip business. Top holdings Intel Corp. (INTC) and Taiwan Semiconductor Manufacturing Co. (TSM) make up more than a quarter of the fund, but SMH offers some geographic diversification – a little more than 30 percent of the fund is invested in stocks from Taiwan, the Netherlands, Singapore, the U.K. and Bermuda.
9. SPDR S&P Semiconductor ETF (XSD)
The XSD is a diversified, balanced fund of semiconductor companies, almost all of which are in the U.S. What is notable is its equal-weighting methodology – XSD weighs each of its 40 holdings the same at each rebalancing so no one stock has an outsized effect on the ETF. However, weights do fluctuate in between rebalancing depending on performance, so currently; top holdings are Inphi Corp. (IPHI), Nvidia Corp. (NVDA) and Advanced Micro Devices (AMD).
10. iShares Global Tech (IXN)
You would imagine that the iShares Global Tech ETF took a worldwide view of the technology sphere, and you'd be less than a quarter correct. Less than 25 percent of the fund is invested in domiciled outside of the U.S. with Japan leading the way at 5.1 percent. With heavily weighted top holdings such as Apple (AAPL, 12.5 percent) and Microsoft Corp. (MSFT, 8.9 percent) this fund shares a lot in common with most other broad tech funds.
Although the use of financial planners is growing, most Americans still tend to take a do-it-yourself approach to building a portfolio and saving for retirement.
Forty percent of respondents in a 2015 survey by the Certified Financial Planner Board of Standards say they utilized financial advisors, an increase from 28 percent in 2010. And while most people are handling their own finances, there are distinct advantages to hiring a professional.
A financial advisor can give investors the discipline to resist investing or divesting reactively, says Angela Coleman, fiduciary investment advisor at Unified Trust Co., headquartered in Kentucky. "We take the emotion out of it," Coleman says.
With the Internet, the world is awash with financial advice, and professional financial advisors can act as a filter, says Andrew Barnett, relationship director at Global Financial Private Capital in Sarasota, Florida.
Financial advisors are a good option for helping clients assess their risk tolerance and then build a portfolio that actually meets what they want, says Drew Horter, founder and president of Horter Investment Management in Cincinnati. He says many people who want to be conservative with their money actually have portfolios that are riskier than they'd like.
Kimberly Foss, founder and president of Empyrion Wealth Management and author of "Wealthy by Design: A 5-Step Plan for Financial Security," recommends interviewing two or three advisors and having one to two meetings with each because this is a relationship that will last "hopefully for the rest of your life," she says.
There are hundreds of thousands of personal financial advisors in America — 249,400 in 2014 according to the Bureau of Labor Statistics — so how should retail investors pick an advisor, whether they are independent or work with a large brokerage, a regional bank or an insurance company?
Consider the fiduciary standard. Barnett advises people to seek advisors who are fiduciaries, which means they are legally responsible to put the clients' best interest in mind before their own.
Non-fiduciary advisors are required only to sell clients what they think is suitable for them. "Dealing with a fiduciary, I think, is critical," Coleman says.
The Department of Labor recently approved a new rule that would require all financial professionals who offer investment advice for retirement accounts to follow the fiduciary standard. But while that rule covers investments in IRAs and 401(k)s, it doesn't impact advisors who are recommending investments for a taxable brokerage account.
Know the pay structure and fees. Coleman recommends that people not pick advisors that are paid solely on commission. An alternative is fee-based advice, where clients are charged a set percentage of assets under management, she says.
Clients with fewer assets to manage may want to choose a fee-based advisor that charges by the hour or a flat annual fee, Coleman says.
Barnett notes that there are now more products such as annuities or real estate investment trusts available as fee-based products.
Opinions vary, but advisor fees could be anywhere from 1 to 2 percent of assets under management. If you have a lot with a financial advisor, that extra percent could be a tidy sum.
This fee is separate from other fees, such as those that come with mutual funds that are disclosed in the prospectus, so it's important to ask advisors if they can break down all the costs of investing, which can include trading, custodial, accounting and sales fees, Barnett says.
Do your homework. Investors should also check into an advisor's background, Coleman says. Know what certifications the advisor holds, and ask advisors for a list of current clients as references.
If an advisor won't provide references, that is a sign of a problem, she says.
In addition to references, investors should ask for an advisor's performance track record, Foss says.
Because a client may have a financial advisor for decades, it's important to find someone they like and trust.
Sometimes that can be accomplished by getting to know the advisor, Coleman says, "Find someone you've got a good rapport with."
Investing in shares is not without risk, but if you do your research and can commit to a long-term strategy you could prosper. Esther Shaw reports
Like many people who want to make their savings work for them, Louise Dungate has become increasingly frustrated by low interest rates. Undaunted by the prospect of taking a risk, the knitwear designer from Balham in south-west London decided to dip her toe in the stock market in an attempt to get a better return.
Despite the unsettled financial climate, the decision has proved profitable for the 29-year-old following her first investment 18 months ago. “Prior to that I’d had money in cash Isas,” she says. “As I’m self-employed I don’t have a regular salary, and need to make my money work as hard as it can.”
Dungate made her first investment in a self-invested personal pension (Sipp). More recently, she opened a stocks-and-shares Isa. “My Sipp now includes investments with Unilever and Lloyds. In the past 18 months I’ve seen the value of my portfolio rise by 4.74%,” she says.
Turning to the stock market could be a more attractive proposition for savers at present, with rates on cash at rock bottom. Ongoing low inflation, weaker economic data, global uncertainties and the weakness in the oil price mean there is little pressure on the Bank of England to raise interest rates any time soon.
Already, tens of millions of people have exposure to the market through their pension pot or Isa, but it’s been a turbulent start to the year. “It’s the worst start on record, in fact,” says Jason Hollands from adviser Tilney Bestinvest. “Markets have reacted to poor economic data from China. The FTSE 100 has been hit hard.”
But while the FTSE may have plunged, one of the upsides of lower share prices is that dividend yields have leapt up on many of these shares.
“The current yield on shares has increased significantly over the past nine months, with the yield of the FTSE 100 index now at a very attractive 4.25% per year,” says Patrick Connolly from adviser Chase de Vere. “The yields on some well-known individual shares look even more enticing, with HSBC at 7.6%, BP at 8.3%, Shell at 9% and Glencore at 14.4%.”
When you invest in shares, income is distributed in the form of dividends. These payments are usually made half-yearly as a reward for holding the company’s shares. As a shareholder you can either take the cash or use the money to buy more shares in the company. Reinvesting dividends can dramatically boost returns over the long term – provided the shares go up.
With yields looking good – Shell, for example, has committed to paying a dividend for the next three years – savers may be wondering about investing their money. The problem is, while the possibility of high yields is appealing, this doesn’t tell the full story.
“Income yields show the level of dividends paid as a proportion of the share price,” says Connolly. “The reason why many shares have attractive-looking yields is because their share prices have fallen, rather than because companies have been increasing their dividend payouts. It isn’t a good position for an existing investor to have a high yield on their shares if this is the result of them having already suffered a big capital loss.”
Many companies, and particularly in sectors such as oil and commodities, he says, are under pressure. “It would be no surprise to see some companies cutting the level of dividends they pay. This could, in turn, lead to further falls in their share price.”
Damien Fahy from finance website MoneytotheMasses, says: “Would-be investors shouldn’t just focus on the current yield of a share. They also need to focus on the likelihood that the dividend will be maintained – and indeed increased – year on year. Shell may have committed to paying a dividend for three years, but elsewhere there has been a swathe of companies cutting dividend payments.”
For Dungate the hope to getting a higher return on her money is worth the risk. “I appreciate that investing in the stock market is risky, but I’m willing to take this risk in the hope of getting a higher return. I’m not investing everything I have, and am prepared for the ups and downs.”
Should you take the risk?
While rising stock market yields may make shares more attractive than other asset classes – such as fixed interest, property and cash – you need to be aware of the risks involved.
“Unlike a cash savings account, investing in the stock market risks losing money,” says Justin Modray from finance site Candid Money. “It’s all very well enjoying a healthy dividend payout, but this may be little consolation if stock market falls mean you’ve lost 10% of your original investment.”
If you are simply fed up with the low rates on cash savings but would endure sleepless nights worrying about the prospect of losing money, the stock market is not for you. “It is better to put up with poor cash returns and sleep peacefully knowing your money is safe,” Modray says.
This is a view shared by Danny Cox from adviser Hargreaves Lansdown: “While the yields may currently be attractive, those uncomfortable with capital risk should stay in cash.”
Invest for the long term
That said, if you are happy with the idea of taking on some risk this could be the time to take the plunge.
“Right now the average variable rate cash Isa is yielding just 0.85%,” Cox says. “This makes the yields on stock markets look very attractive. Equally, investors who brace themselves for the ups and downs will look back at this as being a decent entry point. The UK markets are reasonable value, and a long way off their all-time highs – so provide long-term profit opportunity.”
The key is to only invest money that you can afford to leave there for at least five or 10 years – to smooth out any bumps in the market.
“The volatility of the markets may be off-putting for first-time investors, but the increased investment risk does mean that over the long term there is the potential you could achieve greater than you would from a savings account,” says Fahy. “According to the Barclays Equity Gilt Study equities have produced an average return of around 5.5% a year over the past 50 years. However, in that time there have been big market falls as well as rallies.”
HOW TO GET STARTED
If you are investing in the stock market for the first time, you need to tread carefully. Decide what you want to achieve, how long you are planning to invest for, and how much risk you are prepared to take. Does your homework or take advice – visit unbiased.co.uk, a website that helps you search for local financial advisers?
■ Investment funds investing in individual shares after researching a company carries a high risk. Reduce this by investing in a range of shares through investment funds.
■ Equity income funds for those looking to invest in companies with healthy dividends. Equity income funds typically invest in a spread of FTSE 100 companies. Top picks from Tilney Bestinvest’s Jason Hollands include Standard Life UK Equity Income Unconstrained, Ardevora UK Income, and the smaller company-biased Unicorn UK Income fund.
■ Shop via a platform Good for first-time investors, DIY investment platforms resemble an online supermarket from which you can select from a range of investments provided by different companies, but which are purchased and held in one place. These allow you to mix and match funds from a range of managers, plus you can access a wealth of research, information, tips and tools. Remember to look at the service offered as well as any administration charges, dealing fees and any other extra costs. Platforms include Hargreaves Lansdown, Bestinvest, and The Share Centre.
■ Costs Obviously these vary, and the cheapest option will depend on the types of investment you want, and how big your portfolio is. If you invest in funds expect to pay between 1% and 2% in charges. If you want someone else to run a portfolio of trackers for you – and do the asset allocation – Nutmeg is an option. With annual fees of between 0.3% and 1% it may be a good option for novice investors.
■ Use your Isa If you’ve not used your Isa allowance it is worth popping your funds or shares inside this tax-efficient wrapper.
■ Drip-feed your money Reduce the risk of market timing by investing regular premiums on a monthly basis rather than putting in a lump sum. That way if the market falls you simply buys at a cheaper price the following month. You may be able to invest from as little as £25 a month.
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Whether it’s anxiety about paying the bills, guilt at spending, or feelings of inadequacy over our income, polls frequently show money to be a leading source of worry, and one of the main causes of rows between couples. Even the rich aren’t immune, according to Capgemini’s annual World Wealth Report, with top concerns for millionaires in 2015 ranging from how they will maintain their lifestyle to whether their offspring will mismanage their inheritances.
So how do we make peace with our bank statements and instead spend the wee hours calmly contemplating whether that car alarm will ever stop? The answer, at least according to some, lies not in spreadsheets and interest calculators, but in financial therapy. A burgeoning field in the US, where the five-year-old Financial Therapy Association counts more than 250 members, financial therapy combines traditional financial advice with a more touchy-feely psychological exploration of what is driving a client’s behaviour towards money.
It doesn’t come cheaply, of course, but financial therapists say we should think twice before rolling our eyes: they claim our emotional issues around money could be the exact reason we don’t have more cash to pay our bills.
They say the way we treat money is influenced less by logic and more by deep-seated beliefs that we are often unaware we hold. We may grow up watching our parents struggle with money and subconsciously develop negative, fearful emotions towards it, for example.
Low self-esteem can lead to the self-fulfilling prophecy that we will never make enough to be comfortable. “The obstacles that keep us from having more and being more are rooted in the emotional, psychological and spiritual conditions that have shaped our thoughts,” writes US financial expert Suze Orman in The Road to Wealth: A Comprehensive Guide to Your Money. “In other words, what we have begins with what we think.”
Financial therapists aim to identify and tackle a client’s psychological “blocks” about money through a mixture of established therapy techniques, such as asking them to recall early memories or write down word associations, and classic financial planning tools such as balance sheets and cash flows.
Practitioners tend to come from backgrounds that include psychology, marriage or family therapy, mental health, social work and financial planning, and what they offer depends on their training. A psychologist won’t necessarily be able to advise on Isas, for instance.
The practice has yet to make it to Britain – although Kristy Archuleta, president of the Financial Therapy Association, believes it is only a matter of time – but financial coaches such as Simonne Gnessen tread similar ground. The co-author of Sheconomics and founder of Brighton’s Wise Monkey Financial Coaching, Gnessen came to coaching via a course in neurolinguistic programming.
A petite woman with natural warmth, she had learned from her earlier, 10-year career as a financial adviser that traditional advice often doesn’t go far enough. “The financial industry tends to work on the basis that people are functional with money,” she says, with a wry smile. “You earn, you save a proportion, you always have the future in mind. In my experience, that isn’t the case and most of us are actually a bit dysfunctional.”
Financial coaching addresses the reasons we don’t always treat money in the way we should, identifying unhelpful patterns of behaviour and challenging attitudes we may have unknowingly developed over the years. Gnessen’s clients’ concerns range from debt to retirement, worries about providing for family to feelings of guilt about “undeserved” inheritances.
The reality of someone’s financial situation often has little bearing on their feelings about it, she says. “I’ve sat down with clients who will never run out of money in their lifetimes – and have the bank statements to prove it – yet I’ve had to reassure them again and again that they’re not going to end up destitute. The main issue from my point of view is whether someone’s money behaviour is supporting or hindering them – and if it’s hindering them, how can we change that?”
Sitting opposite Gnessen in her peaceful mews house office, I tentatively begin to describe my own feelings towards money. It’s possibly the first time I’ve ever discussed the subject from an emotional perspective and as we talk, I realise my attitudes are far from neutral, mainly oscillating between anxiety and an ill-advised recklessness.
Gnessen says she can understand the recklessness – it’s a time-honoured release from the exertion of self-control – but is curious about where the anxiety stems from. The idea someone wouldn’t be at least a little anxious about money is new to me, perhaps highlighting just how deep-seated the attitude is. When pressed, I identify debt, the precarious nature of freelance work and the prohibitive cost of living, but it strikes me that it’s something I’ve felt since the days when I only had my weekly pocket money to manage.
I think of money as an abstract concept, yet it’s inherently bound up with negative feelings. Although we start to unpick the reasons for this, I’m less interested in where the attitude has come from than how it’s holding me back and what I can do to overcome it.
Gnessen believes my worry about money is leading to some poor decisions in how I manage it. The debt I’ve accrued over years of renting in expensive cities and living slightly beyond my modest means is, at under £10,000, far from insurmountable, but it causes me grief. The solution is clearly to pay it off, but it’s not quite happening and Gnessen thinks this is related to my negative feelings about the situation.
I make hefty monthly repayments because they make me feel better initially (I’m tackling this problem!) but on an unpredictable freelance income they often end up leading to cashflow problems and more borrowing further down the line; cue more worry.
She suggests that instead of reacting to the anxiety the debt causes me by trying to pay it off quickly, I should instead focus on a more sustainable goal such as not accruing any new debt. I could then use the money “saved” by making more manageable repayments to build up an emergency pot I can draw on when times are tight, rather than resorting to more borrowing. The point, Gnessen says, is to balance the see-saw of emotions that accompanies the cycle of debt and repayment and encourage calmer, more rational financial behaviour.
Gnessen also thinks I have become too comfortable (in a miserable sort of way) with being in debt and am, inadvertently, ensuring I stay there. She points to the fact I have never allowed my borrowing to escalate beyond a certain level, but have frequently paid it down and then allowed it to climb back up again.
She asks me to imagine myself in a new situation and tell her what having money could do for me. I can only come up with not having to worry about it, which seems pretty good but apparently isn’t positive enough. Positive goals are known to be more motivating than negative ones, Gnessen says.
I’m not wholly convinced by this – wouldn’t there be a lot of rich daydreamers if that were the case? – and I struggle with the idea that worry isn’t also a good motivator. If we didn’t worry about paying bills and keeping a roof over our heads, I’m not sure many of us would go to work at all. Still, I concede that my perceived “reward” for getting out of debt is perhaps not enough of a reward and promise to work on finding a more meaningful alternative.
Talking about money with a stranger feels both exposing and liberating. It’s a subject that provokes strong emotions but we rarely discuss it even with our closest friends. Perhaps financial therapy just offers a much-needed platform to discuss these feelings with someone who won’t judge us. But I think it’s more practical than that.
For me, the soul-searching is interesting but becomes genuinely useful when it identifies patterns of unhelpful behavior. Given our tendency to repeat mistakes in other areas of our lives, I think most of us could benefit from a closer examination of our attitudes to money.
Financial coaching with Simone Gnessen starts from £185 for a two-hour session.
Achieve your Financial Goals
Becoming a client of Sparks Corporation is quite easy and is financially rewarding. We appreciate our clients’ great desire to achieve their investment objectives according to their unique circumstances. For this purpose, we endeavor to obtain a comprehensive understanding of your financial requirements and what you hope to gain by committing to an investment strategy with our company.
Without an in-depth and broad vision of your expectations, we cannot build an effective partnership of your dreams and our experiences.
Discretionary and Non-Discretionary Management
We offer two Unique Account Structures which are managed in various ways:
Discretionary portfolio management includes a fee-based service requiring minimal input into the investment decision-making procedure. We will provide you with a list of strategies, each fitted to your specific goals in mind. Through counsel and discussion with your wealth advisor, you will choose a plan that suits your personal convenience.
We commonly accept applications with minimum investment capabilities of $30,000. Our services are fee-based and directly connected to a multi-leveled fee schedule based on the level of investment.
Non-discretionary management includes a transaction and commission-based model designed to incorporate but not limited to variables of asset class, introduction, preliminary guidance and level of capital invested.
Clients making use of our non-discretionary services are encouraged to discuss this choice in detail with his or her wealth advisor before applying for assistance.
Flexible Account Management Options
We appreciate our every client’s need to comprehend their financial and personal conditions as well as their need to develop their potential to create wealth or to enhance it. With every client being unique and different from every other client, our job is quite a challenging task. Because of this, we have developed several account management services to accommodate a selection of common choices priced based on the level of service required by a particular client. They are the following:
Brokerage Transaction Accounts
We deliver a complete range of brokerage transaction services to incorporate currency, margin trading futures and options.
Fee Based Accounts
We provide a transparent fee-based service that has a pre-determined management fee depending on the level and type of services needed. Our comprehensive wealth management solutions allow clients with the versatility to select a single service or to join together two or more services into a unified wealth management structure.
Discretionary Portfolio Management
This is based on a customized Client Investment Profile (CIP) which allows clients to assign the responsibility of decision-making to his or her Wealth Advisor. The discretionary portfolio management service presents quarterly reporting and retains the flexibility for our clients to be involved with innovative allocation of assets.
Inclusive Asset Management
As client and advisor, a preset fee is agreed upon to free the pursuit of investment strategy from personal transaction costs. The inclusive asset management account retains the benefit of advice from an assigned team made up of Wealth Advisors as well as administrative support.
Committed to Satisfying Client Expectations
Our long and diversified experience in the industry has provided us the understanding of our clients’ goals, enabling us to work at delivering their investment needs and, thereby, strengthening our relationships which serve as the foundation of our company’s stability.
We believe that our independence is a valuable asset which provides an investment experience that is fitted to suit the specific needs and goals of every client under our care. Our assistance has, as a result, remained unbiased as we build practical wealth solutions for our clients.
Sparks Corporation does not sell products or prescribe self-oriented advice or information. On the contrary, we objectively consider what our clients say and what they want to accomplish and appreciate their situations before coming out with a clear plan to satisfy their requirements judiciously and efficiently.
Declaration of Rights
What to Expect
We subscribe to the principle that maintaining productive relationships with our clients requires a solid foundation. To set up that foundation and to assure that each client receives a reliable and excellent service, we present a Declaration of Rights to assist clients conceive expectations of our service performance.
Quality of Service
Clients deserve and expect proactive services delivered in a timely and courteous manner.
Our clients will retain their original right to have direct access to a committed group of experts who are individually and collectively responsible for the efficient performance and management of our investment services. As individuals, each professional is chosen on his or her qualifications as an expert in one’s particular financial field. As a group, they work together to deliver creative solutions to remove obstacles our clients may encounter on a day-to-day basis. Our experts are our clients’ first line of defense against challenges in their investments. Keeping a constant watch over our clients’ welfare is our secret to our dependability and our excellent services.
Our Advice, Your Decisions
Our clients have the option of selecting between discretionary management or non-discretionary management-based services. We provide unbiased advice founded on our in-house current research output, present suggestions that we feel are highly appropriate to the prevailing conditions of every client, and then execute the strategy upon the clients’ approval.
Trust and transparency go together as one closely-linked requirement for excellent service. Our clients are certainly entitled to valuable information of the fees they expect to pay for our advisory services, deals and maintained portfolio management. We commit to divulge all rationales to our methods and explanations to issues raised without the use of confusing technical jargon.
We believe our clients should not wait for us to give attention to their affairs. Unhindered communication lines are provided together with direct access to our professionals. Numerous channels of communication are open and made available to guarantee that we do attend to the client's every need. The client deserves this facility and takes extra effort to provide it constantly.
Effective financial management goes beyond sound selection of investments. Transactional execution can be maximized to exploit currency-exchange potentials, by properly timing executions and by monitoring transactional expenses.
Sparks Corporation welcomes you to a promising world of wealth-building opportunities. As a leading provider of wealth management services and investment solutions, we have proven our capability to surmount dire economic obstacles and successfully benefited our global clients in prudently managing their assets through efficient planning in order to achieve their financial goals.