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Chat live to a financial expert

June Cross
To help you sort out your finances Tiscali organised a a live web chat with an Independent Financial Adviser - June Cross, MSFA AIFP of Professional Partnerships. Here is a transcript of the session.

Moderator Hi everyone, June is just arriving in the office, but you can send your questions in now if you like.

noddy What does MSFA AIFP stand for?
June Cross MSFA means Member of the Society of Financial Advisers and AIFP is Associate of the Institute of Financial Planning. The first ones are earned by examination and the second lot are for an institution you can't belong to unless you've done the exams and reached a certain standard.

Marcus Why would I need an independent financial adviser? Can't my local building society advise me just as well? Or am I missing something?
June Cross An independent financial adviser (particularly fee-based) should have no bias to one organisation or product range. A building society adviser is sometimes tied to that particular society and can't advise on the whole range of investment products. It is likely that this will change in the near future.

flump I'm interested in becoming a financial adviser, how do I go about it?
June Cross Ring me! No seriously - approach insurance companies, banks building societies that have a structured training programme or a financial services degree at Sheffield Hallam University - contact Peter McGregor or recruitment agencies starting as office junior/administrator for IFA companies.

Subs How do I find an IFA who does not just want to push the products offering the highest commision rates, eg with profits bonds, when I want recommendations on a tracker ISA?
June Cross Contact the Institute of Financial Planning web site where the emphasis is on financial planning rather than pushing products.

zeus My old company went under and I had a pension scheme with them. Since they have gone under I no longer pay into it and neither do they. How do I transfer that money to my long running personal pension?
June Cross Someone should be dealing with the pension plan - whatever type of plan it is so you should contact them. Find out what is going on and what you will be offered. Take that information to an IFA specialising in pensions. Contact the administrators of the company to find out who is dealing with the pension scheme

flump Yeah I know that June, but I want to become an IFA not affiliated, is it still best to go through a biased institution and transfer to become independent later? I'm doing a degree in economics at the moment.
June Cross It is difficult to get industry training. The big companies provide some, although it is generally not good. Most people in the industry have come from insurance companies and the big consultants. A lot of IFA firms are small to medium size and traditionally training has been on the job. it could just be looking at web sites for companies that you like the sound of. Most websites will have a recruitment page.

Subs So what please is the best UK tracker fund ISA to go for?
June Cross We only know which is the best after the event. A tracker fund is designed to track the index not achieve returns in excess of this in fact returns are likely to be slightly less than the index because of charges. so the answer is look for an index fund with low charges.

Cat_Thief June do you feel that the entire British Financial industry is corrupt? Do you think that its time for major Government intervention especially in the Accounting Profession where Agency problems are failing to be resolved by the UITF or the ASB amending UKGAAP?
June Cross Most of it! Seriously a lot of the financial services industry suffers from a history that lends itself to corruption and this is going to take some time to put right. As for Government intervention it doesn't always work the way it is intended.

Cat_Thief The British tax assessment is ironically called self-assessment, do you not feel it's time for an overhaul as most laymen would find it impossible to complete an SA100 return?
June Cross I think the Revenue are pretty helpful. I think it is just something we have got to get used to doing. I hate doing it myself but feel I ought to know how. If you get stuck ring the Inland Revenue helpline and they are really good. If you are having real problems you can make an appointment to go and see them.

mr_smith I quite fancy the idea of having a Swiss bank account - just to impress the girls - is there any real point of doing that, or do you have to be super-rich?
June Cross Not to impress the girls!

Graham Langman I was forced to give up work early through reasons beyond my control and I need extra income urgently I have my redundancy payment to invest and would like advice on income investing I am a tax payer thank you.
June Cross In your situation Graham you need to talk to a good IFA who will look at your situation as a whole. Advice on income producing investments will come into this.

trixi I want to set up my first savings account. I'm happy to have one which doesn't allow me immediate access. What would you recommend?
June Cross If you are a taxpayer I would recommend that you use your cash Isa allowance and check the Tiscali savings checker for best rates of interest. If it is your first savings account and you are serious about saving a postal account will stop you from taking the money out on a whim.

Cat_Thief On the point of the Swiss banking system: Would you welcome a banking system with such a lack of transparency in the UK, or do you feel it would lead to incidents such as the Jewish Gold case in Switzerland?
June Cross Transparency is welcome throughout the financial services industry. Other than that no comment.

pinkd I would like to reduce my mortgage years by remortgaging. I owe ¯¿½22,000 and I would like to repay this over 5-7 years if possible. Where will I get the best deal?
June Cross What you need is a specialised mortgage broker because deals change very frequently and they have all these things at their fingertips. Check out the mortgage section on Tiscali.

Patricia Taylor I am going to be a university student in September and I know that there are many student bank accounts I can choose from. Do you have any advice for what I should look for? Are there any that you would recommend?
June Cross Shop around at the time. Look for dedicated student adviser at the bank, compare overdrafts, incentives - eg one bank offers a railcard - and don't forget when you are not a student to look again. It might not be the right bank for you then. Oh! be aware that you don't get your incentive until your student loan is paid in.

Skinkie I have an NHS pension that is being used as equity in a divorce settlement against a house currently worth approx ¯¿½65K - are they equal in worth or can he ask me for money?
June Cross This is a very complicated question. In a divorce settlement a couple's total assets are usually taken into account. And the idea is that they should be split as fairly as possible. Valuing a pension, particularly one like the NHS scheme can only be done by a specialist. You really need to go to an IFA that specialises in pensions and divorce if you are concerned about the financial arrangements.

Stephen Wilson What would you advise as regards investments that will yield regular income to supplement a pension with investing for only three to five years at a time? I have looked at mini cash ISAs and Building Society Guaranteed Income Reserve accounts. I do not want to invest much capital in risk ventures and I do need to get at the income yearly or every few years?
June Cross Three-five year deposit- based guaranteed income bonds for a series of years will fit the bill but be aware there will be no capital growth.

J.H.White My company pension fund is looking insecure. The company has already withdrawn cover from the fund holders not yet retired. I am 70 years old. I have ¯¿½400,000 invested through two companies held in Mutual funds and direct stocks and shares for growth which I am not getting. If I switched to fixed interest without buying an annuity what sort of more or les guaranteed return can I get.
June Cross At present under current legislation you will have to buy an annuity in five years' time. I would certainly start moving some of your pension fund into less volatile funds - returns from fixed interest stocks will find their level relative to interest rates...

calmart Where best to put ¯¿½5,000 for a 15-year-old which will not be needed for university. Would like it maybe for deposit on house at age 24/25 and to be a suprise for him!
June Cross If you are not using your equity Isa allowance consider using this. If you are you could use unit trusts, investments trusts and switch into an Isa later. This will give tax-efficient capital growth with no capital gain for you when the cash is realised.

Rosalind Hamill How does one apply for gilts - and what would be the best to go for?
June Cross Assuming that gilts are a suitable investment for you bearing in mind they produce income with no capital growth you can telephone 0800 818614 for a free guide to purchasing gilts - I think it is a Bank of England booklet.

calmart Would that be in my name or his?
ModeratorThis question relates to the question about the housebuying for a 24-yr-old June Cross In yours

Kevin White b>I currently have a mortgage to the value of ¯¿½90,000, part of which (¯¿½50,000) is covered by various endowment policies. On the 10th of May this year, the first policy matures to the value of ¯¿½21,000. Having regard to the fact there will almost certainly be a shortfall on the remaining policies, I have considered investing the proceeds of this first policy for the next 10 years rather than paying it off as a lump sum against the outstanding mortgage. Firstly, do you consider this to be the right decision and secondly, where best could I invest the money to secure the best return with minimum risk?

June Cross You do need full advice relating to your whole financial situation rather than just this issue. Don't forget if you repay your mortgage you will save all the interest on this section over the next 13 years and what you save each month could be used to invest to cover the expected shortfall.

Colin Godfrey I am coming up 50 in July - I have no pension provision. I am contemplating investing to build a fund across safe - risky investments such as ISA's to premium bonds, what do you suggest might be a good strategy to follow.
June Cross You need to start moving as quickly as possible. Do a budget, decide what you can save/invest from capital and disposable income. At your age this will need to be as much as you can afford. Personal pensions and Isas will use tax efficient allowances. At your age you can invest 25% of your taxable earnings into a pension each year - and your wife. If she is not earning she could use the new stakeholder pension allowance of ¯¿½3,600 a year and you could both use your Isa allowances.

Sheila & Dennis Hockenhull My husband and I have money off shore. At the year end in March we found that we had both lost a substantial amount of money last year. Would it be prudent to leave the money where it is and take less income from it(we take an income quarterly )or is now the time to bring the money in and put it into something else which will give us an income without losing capital. If so what do you recommend.
June Cross You really need full advice. Consider bringing the money onshore but go to an IFA before you do anything.

S Chattenton I am thinking of renting out my home and living in rented accommodation myself. Will I be liable to pay tax on all rent collected or just the profit of receiving rent after related costs? Are there any publications available on this subject?
June Cross Broadly you pay tax on rent after expenses and allowances which will include interest payments on the mortgage, insurance and a certain amount of depreciation. There is a good Which guide - Which Guide to Renting I think, I can't remember the exact title. You should be able to get this from the library. Also if you ring the Inland Revenue they have a small booklet and a bigger publication on rental income and tax.

Bubba I am with I am interested in whether there is a similar 'pay as much as you want' scheme available at better interest rates.
June Cross Yes, there might be. Northern Rock and the Woolwich are the most comparable, both have cheque book facilities and provide separate accounts but you will need to check rates before you decide whether or not to move.

Moderator Hi everyone, June's brain is starting to hurt with all your excellent questions, just a couple more before she has to go I'm afraid!

Graham Clemson With all the latest on pensions in the media. I do not understand SERPS at all, I am 50 and have been with a company for 3 years but am about to change to another company, Q. - Am I in SERPS? Should I be in SERPS? and can I transfer what pension I have in the 3 years to the new company?
June Cross To find out whether you are in Serps or not you need to get a form BR19 from the Benefits Agency. Complete it and send it back and they will let you know what your State Pension entitlement is and whether or not you have any Serps pension to come. Whether or not you should be in Serps will depend upon your income, the amount of investment risk you are prepared to take and the company scheme available to you.

Your new company will able to tell you whether or not the new pension scheme is contracted out of serps or not and whether or not they will accept a transfer into the scheme. Consult your IFA before making the transfer.

Justin Goodman I am buying a house in South Africa and would appreciate it if you could give me some advice on the best way to go about transferring money to South Africa to get the best exchange rate plus if there are any pitfall's I should look out for? Many thanks.
June Cross This transaction sounds as though it could be beset with pitfalls. Transferring the money could be the easiest part. The best way to transfer money is to ask your bank who will arrange this for you. Exchange rates can't be predicted and will be that applicable on the day of transfer. Transferring the money should be very straightforward.

John Ray I am 54 looking to save ¯¿½200 per month. I am after the best way to maximize my return on this yet not have excessive risk. I am happy to go for equity ISA. I suppose I am after an average risk but steady performance. Plan for over five years please.
June Cross Using your Isa allowance will allow tax-efficient returnts. Look for a medium-risk UK fund investing in large and medium-sized companies. Don't forget any equity fund can fall in value as well as rise. You don't say how long you wish to invest for, if you think you may want your money back within five years an equity fund may no be best for you.

Michael Dale I have ¯¿½1,000 cash Isa with Northern Rock opened this tax year. We now have a further ¯¿½1,000 to invest. Would like to start building up a portfolio of investments in unit trusts and trackers etc. If I open up a mini or maxi Isa and invest ¯¿½1,000 into one particular fund (I am aware of max inputs of ¯¿½3,000 for mini or ¯¿½7000 for maxi share options) can I invest a further ¯¿½1,000, say in 2 months time, in a different fund but under the same same mini Isa? - or do we have to start a new mini/ maxi Isa?
June Cross The rules are one Isa provider per person per year. If you are using the mini cash Isa allowance then the maximum equity Isa will be ¯¿½3,000. If you use a fund supermarket you can then spread providers and funds more easily.

Moderator Right folks, it's last question time!!!!

Michael Baggott 18 months ago I took out an interest only mortgage. I plan to use a Standard Life ISA to pay it off together with some endowments that are due to mature in about 6 years. Because I am still paying solicitors bills for my divorce I have not yet set up the ISA.
June Cross If you are only paying in ¯¿½40 a month into your pension you are seriously underpensioned. Sounds like you need a good financial adviser to produce a plan for you for pension and paying off your mortgage.

Moderator OK then, just one more...

Jan Carter I have a car loan with finance the interest rate is very high, but I have a bad credit record previously and found it hard to get a loan for my car, who can I apply to for a cheaper rate to pay this loan off and pay less in the long run. Is there any lender that will help people who had bad credit.
June Cross There isn't a lender that will help in the case of a car loan for someone with a bad credit history. If you have a mortgage you may be able to remortgage, but with high interest rates. I would consider using a financial counsellor to get your finances back on track.

Moderator Right that's it, I want to thank June for popping in today and wish her all the best for the future! Take care June, and hopefully see you soon!!! June Cross I'd be very happy to come back as I have enjoyed it. Thanks for all your interesting questions - and don't forget to use an IFA for the best independent financial advice.

Skinkie Thank you June :-)

Cat_Thief Accountants are better than IFA's

June Cross At doing accounts - yes!

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