Visit our sponsor.
Welcome to uk.finance FAQ.
It is prepared by Ian Dickson , a numerical analyst who designed the Pensions Analyser software to help IFAs assess the impact of pension contract charges, editor and publisher of Moneyweb and ex IFA, from the goodness of his own heart. Contact at ian@iand.demon.co.uk
WARNING. THE INFORMATION AND COMMENT WITHIN THIS GROUP IS INFORMAL AND SHOULD NOT BE USED AS THE BASIS FOR ANY SPECIFIC ACTION, ANY MORE THAN YOU WOULD MAKE AN IMPORTANT DECISION AFTER A CHAT IN A PUB. ( If you are impressed with someone and wish to enter a formal business relationship then contact them in private and proceed in accordance with their regulatory body ).
Useful additions are welcome and will be credited, with email address if requested.
The questions in this FAQ are derived from my own experience, and will be amended as the group develops.
So, here are the frequently needed answers.
1) Who is on uk.finance?
Various people ranging from specialised financial experts to ordinary people wanting advice. Feel free to ask anything. You might not get an answer, but you may get people thinking.
2) What is it for?
It is for discussing all aspects of UK finance, from tax, to the latest floatation, to general and specific discussions on all topics.
It is not for people who want to abolish money, nor should it be used for crude advertising. Crude is of course in the eye of the beholder, but in general new ground in product design is interesting, me too announcements are not. If setting up a web site or on line system let me know and you will be added to Moneyweb.
Professionals will find some discussion reticent for compliance reasons. Join the Uk Financial Services List for a private discussion between professionals. Email FinservUK@iand.demon.co.uk, or contact me on ian@iand.demon.co.uk to join. List is moderated, no charges. 3) I have a problem and I post to the group. How do I know who to believe?
Watch the group for a while and you will probably find people who you think make sense. Much of what is said is opinion and NOT fact, and an adviser might tell one person one thing and another something else because all circumstances vary, ( with the detail not seen on the net ).
4) I need advice, where can I get it?
In the first instance post to the group, but in order to get serious you need to talk to an adviser. IMO Independent Financial Advisers are the best, ( a term that includes accountants, solicitors and insurance brokers where they offer financial services). See the Advisers FAQ for my reasons.
Tied advisers now getting hot under the collar please post to the group if you wish, but personal flames will be ignored.
5) I want to avoid a commission orientated salesman
See Advisers FAQ
6) Beginners start here.
What is.....? is always a good place to start with investments.
Unit Trust. In essence a Unit Trust is a part of a larger investment which allows many small investors access to the market at low cost and gives them a good spread. Expect to pay 5-6% to buy in and 1-2% a year in charges. Most PEPS invest in unit trusts, and avoid double charging.
Investment Trust. This is a SHARE in a special kind of public company. Be very sure that you understand exactly what you are buying as they vary considerably.( If any of the following appear in the literature be very careful to understand your actions. Split Capital, Zero, Preference, Capital, or Income Shares.) There is a debate between UTs and ITs that is basically hot air. ( The key thing is to avoid holding too much cash).
Gilts. Loans to the Government. IMO gilts are not for the small investor buying directly as they are much more risky than most people who buy them realise. They are best when used by fund managers as "stabilisers" in managed and pension funds. If you really want one, go to the Post Office and avoid dealing costs.
Life Insurance Bonds. Except when using a fund that cannot be constructed in any other way, or you are a Higher Rate Taxpayer, these are inferior to Peps, Unit Trusts and Investment Trusts. Special Case- With Profit Bond. IMO these are investments that carry a higher market risk than most buyers appreciate and have been oversold. They do have a place, but they basically work by lying. The company lies about the value of the fund, and you don't panic in a fall.
A growing number of sites now provide financial information at all levels. Browse. Quick plug for mine. www.moneyweb.co.uk
13) Make Money Fast schemes
Beware. First of all these schemes don't work. For full reasons see my detailed essay on Moneyweb ( go to the Home page). Secondly they are now completely illegal. If they include they are caught by the laws against Pyramid Selling. If there is no product ( other than dubious memberships, which is how they got around the anti Pyramid rules) they are caught by new Money Circulation Scheme rules. If the spam is posted from UK your ( or their ) local trading Standards would like to know about it.
A lot of frauds try to look like MLMs. Beware of anything that cannot demonstrate working product in your own home. ( At time of writing I am hearing of a number of "magic box soon to be unveiled" schemes that sound highly fishy to me. I also hear that the chap behind the water based car - Equinox in 96 - has not delivered as promised).
That said MLM is NOT a pyramid in the automatically fraudulent sense and can be a valid way of doing buisness, but be aware that it will not make you rich unless it has stunning products with a great sales angle, and you are in VERY early, and you are a seriously motivating people type person. Most MLMers make a small loss or small profit, and if you like party plan and hard work a modest second income is perfectly feasible with many MLMs. Judge them on their business merits ( product, price and could YOU market it / find people who can RETAIL it).