Faced with the possibility of taking a tax free lump sum from your pension fund, you are presented with many temptations.
We're not necessarily talking about buying a sports car or taking a round-the-world cruise, it might be something seemingly prudent, such as using the lump sum to pay off a mortgage to reduce outgoings.
But, is that such a good idea?
Pensions and savings are important to people, they are, after all, what they're going to rely on for quality of life over - hopefully - many years.
That's why it's so important to make sure that they're protected as much as possible. That doesn't just mean protection from poor investment choices or fraudsters - although this is obviously important. It's also important to protect these precious assets from neglect and ignorance of the various pieces of legislation and tax rules which can be a minefield for the unwary. The best way to guard against this is to always seek professional advice to regularly review your retirement strategy.
People are all different. Their characteristics, priorities, personal histories, family circumstances, financial situations and retirement plans all vary.
The recognition of this simple truth underpins our whole philosophy at Reeves Independent and informs the way we work with our clients - treating each individual with deserving and individual attention. To ensure that, we also believe in regular two-way communication between our team and the client.
But how does that work out in practise?
At Reeves Independent we constantly monitor the state of the markets and we advise clients accordingly when we think their interests are best served by an adjustment to their investments.
We tell them what changes are necessary to anticipate or react to market changes as appropriate, given the level of risk they are comfortable with. Not every IFA does this.
Financial and pensions advisers – like any other professionals – can be guilty of using too much jargon.
At best, this irritates the uninitiated and, at worst, mystifies them, obscuring what should often be straightforward.
One of the most basic things that often isn’t adequately explained, but is fundamental to a proper understanding of investments, are the various asset classes and their characteristics.
Put simply, an asset class is a type of investment. There are benefits in holding different asset classes and investing in them is appropriate in different sets of circumstances. Too many investors don’t appreciate the importance of adjusting their investments between classes as conditions change.
Let’s run through some of the main asset classes.
