Investing Insiders Weekly #7

Top Story

GET READY FOR GUIDANCE…

The FCA and government are expected to release their final rules around something called the ‘advice/guidance boundary’ today.

This will include new rules that basically allow companies like your pension provider to give you personalised guidance – also called ‘targeted support’.

What does that mean? Well, for example, your pension company might suggest what you could do with your pension, based on what other people in a similar situation to you are doing with theirs.

✔️The good news: This is long overdue, to be honest. Until now, there have basically been two camps: people with shed loads of money who can afford to pay for financial advice, and everyone else.

Now, the ‘everyone else’ camp will actually get some kind of guidance that could help them make good decisions with their money.

❌The bad news: There are… concerns, that companies could use these rules to, without beating around the bush, push their own products onto their customers, rather than doing the actual right thing by them. You’d hope not, but, it’s not beyond the realms of possibility.

However, there is a thing called ‘consumer duty’ that financial firms have to follow, and the financial regulator will be pretty hot on how firms use these new rules.

💡The takeaway: Be aware that your firm will soon be able to help guide you with your finances. If you have concerns about your money and want help, ask!

But remember, you can always make your own decisions and you don’t have to go with what your company suggests if you aren’t happy with it.

One Minute Market Fix

Stock markets around Europe, including in the UK, have fallen this week amid ongoing uncertainty about the conflict between Iran and Israel and trade tariffs in the US.

The major US indexes, the S&P 500 and Dow, have both stalled as they wait to hear who president Trump picks as his next Fed chair.

More from thee regulator…

MORE ON MORTGAGES… The FCA is rewriting the mortgage rule book again

🤓In a nutshell: The UK regulator has released another consultation – where it puts its proposals out to the jury and gets feedback from companies – about making it even easier to get a mortgage.

The FCA says: “First-time buyers, the self-employed and people borrowing into retirement could benefit from further possible changes to mortgage rules.”

How, you ask? Well, until recently, mortgage affordability rules have been pretty strict. But times have changed, and the FCA wants mortgage lenders to feel like they can offer bigger loans to a wider range of customers without being worried about getting told off.

💡The takeaway: If you’re thinking of buying or moving house, things might be about to get easier. The consultation ends in September – and of course, we’ll keep you updated on the progress.

Platform Watch 👀

A lot of investment platforms are advertising that savers can invest “as little as £1”. 

But, many fail to highlight that you will end up paying a much higher percentage of your investments in fees if you have a smaller pot.

For example, if you invest £25 and pay £1.50 to buy a fund with it, you’ve spent 6% of your investment just on trading fees, whereas if you invest £250 and pay £1.50 to buy a fund, you’ve spent just 0.6%.

Make sure to work out how much of your investment you’ll be spending on trading fees before placing any trades.

Insider Edge: What Smart Money Is Watching

Investing Insiders writer Brean Horne gives the run-down on ethical investing and what it means for your money.

Given the geo-political turmoil in the world (and ongoing climate crisis), it’s natural to feel a tad…helpless when it comes to having a positive impact. But your daily financial decisions could help fund the change you want to see in the world. 

How, you say? Well, that’s where ethical investing steps in! 

Investing ethically means that you choose to put your money into funds (and other assets) that align with your moral values. 

For example, choosing funds that don’t invest in companies involved with: 

❌weapons, tobacco, mining or animal testing

Instead, you might choose a fund which invests in companies that have a positive impact, like: 

✅renewable energy, clean technology, social infrastructure and sustainable agriculture 

But won’t you miss out on higher returns? Not necessarily. There’s a common myth that investing ethically means you forgo higher growth on your money. 

However, making money and making a difference aren’t mutually exclusive! In fact, one of our top-rated ethical funds generated a five-year return of 84.6%.

Check out our best ethical funds guide to find out how…

Rate Of The Week 💵

Savings rates have held their ground this week after the Bank of England held its base rate at 4.25%.

In fact, Zopa has just launched its first current account, which comes with a whopping 7.10% AER regular savings account.

You can also grab 2% cashback on bills and you can spend abroad fee-free. 

The catch: The maximum you can pay into your savings account is £300 a month.