For as long as I can remember the utilities have been considered safe havens to create income from a portfolio. Not anymore.
Whether because of the move by major investors away from the sector, or because of the fear of huge compensation payments due to accidents (remember BP) or just because my clients and many thousands of others care about the environment.
Investments in utilities are no longer a reliable income stream.
If It has been your habit to rely on your financial adviser, the bank or the man down the pub for investment advice, perhaps it is time to start thinking about it with a bit more insight.
Ask more questions about the corporate governance of firms or the way they treat their people or their respect for the environment.
Could taking professional advice save you money?
Yes, but I would say that wouldn’t I?
I had a question from a friend today, “would it be better for me to have a smaller mortgage by accepting money from my Grandmother?”
That sounds very straight forward and there could be an easy answer but what if . . .
. . . what if the money from Grandmother is a gift that becomes a chargeable gift under the Inheritance Tax Rules?
Perhaps a bit more thought and a discussion with someone who understands the rules might ensure that the correct outcome is achieved.
On saving for retirement, is a pension always the correct answer?
Well that depends on even more variables; for example, your age and tax status now and in the foreseeable future. How you are to use the funds, as income or to make capital purchases.
What sort of assets are you to invest in, interest generating or capital growth, each of which is taxed differently. Are you concerned to minimise the inheritance tax bill on your death and/or pass on assets to the next generation?
As in any profession, the quality of the professional will vary. But just because some are less qualified or experienced than others does not mean that you avoid all professional advice.
I might, for example, feel confident to change an electric plug but I am not an electrician so I would never attempt anything more challenging. Why is it necessary for a qualified electrician to re-wire your house? Because so many do it yourself householders created a fire hazard, which they came to regret – if they survived the fire that is.
All the evidence is that taking qualified advice gives better outcomes that make the cost of advice really worth it.