Online advice to run your finances
Personal financial pointers may soon be too pricey for many, but plenty of help is at hand via the internet
Sunday 25 November 2012
Financial advice is poised to undergo a transformation. In a few weeks' time, financial advisers will no longer be allowed to gather commissions, and will have to levy fees instead.
The Retail Distribution Review (RDR) as it's called, could price many people out of face-to-face financial advice. The RDR has worthy intentions – it will see commission-based financial advice banned in a bid to reduce mis-selling and will also force independent financial advisers (IFAs) to be qualified to much higher standards. However, upfront payments – perhaps running into four figures – will be a big deterrent, particularly for investors with smaller portfolios who are often the very people who most need help. This will leave an important gap to fill.
Fortunately, many sites and web tools are springing up to bridge that gap, but where should you start and what do you need to watch out for?
Reputable fund platforms such as Fidelity FundsNetwork and Hargreaves Lansdown already provide detailed information for investors, but today, Bestinvest has launched its new Free Investment Report Service & Tool (bestinvest.co.uk).
This is designed to help people manage their existing investments and analyse their portfolios in four key areas: exposure to risk (using market benchmarks and Bestinvest's own models); asset allocation (to see how balanced it is); quality and performance (using fund ratings given by the Bestinvest research team); and annual costs.
"Much has been written about the expected explosion in 'DIY' investing, but traditional, no frills, execution-only services, focused primarily on fund selection and reducing transaction costs, do not offer a magic bullet for servicing those investors who are expected to be orphaned from the advice market," says Jason Hollands, the managing director at Bestinvest.
"These investors will need access to educational material, rigorous research and user-friendly guidance tools to help them navigate the investment maze."
Post RDR, a web-based, simplified advice service such as Money on Toast, from IFA firm CPN Investment Management, could also prove popular. You can access basic advice and product recommendations for free, but cross-selling is how these sites make money so they do earn a fee if you go on to buy anything through the site. Of course, there is no obligation to do this and if you want to talk to a human instead, you can book a 20-minute virtual appointment via Skype with a qualified adviser for a reasonable £35 a pop.
Getting an overall picture of your financial health is a big step in clever financial planning.
An aggregator site such as Moneydashboard.com makes this easy, providing a snapshot of all your online current savings and credit-card transactions in one place so that you can track your finances in real time.
After your first log in, the past three months' worth of statements are automatically loaded and you can start analysing your habits immediately using clever tools such as the "intelligent tagging" function to group your spending into categories.
Other useful features include the "future planner" for personalising financial goals, charts to see your spending habits at a glance and what Money Dashboard called a "clear cash" figure to see what spare money you have available from your current account after any planned outgoings have been accounted for. It can also use your past spending patterns to predict future outgoings and potential savings so you can budget realistically for the future.
You may be nervous about having all your details in one place and you should tread carefully when using software that isn't approved by your bank. You could even come unstuck if you need to make a refund claim for fraud because banks view aggregator sites as third parties. Ultimately, however, your account numbers and passwords aren't actually stored on their servers and as this is a read-only service, you can't actually withdraw or transfer any money.
Competitors include First Direct and Egg. However, First Direct's Internet Banking Plus cannot be used with Macs and only Egg customers can use its Money Manager service.
Lovemoney.com also offers "money track", which uses your bank statements to create an automatic budget. As with Money Dashboard, you cannot yet include your investments so you don't get a full picture of your finances, but you can access your online bank and credit-card accounts in one place, along with an analysis of your spending habits.
Financial planning tools
Sites such as MoneyVista.com are advanced financial planning tools.
You can quickly upload details about your income, expenses, debt, protection and investments and this information is then used to create an instant, personalised plan.
The "savings watch" tool is a big selling point here because it tracks your savings accounts and sends you alerts when your bank drops interest rates, or when a product paying a higher rate becomes available.
Otherwise, the more information you provide, the more interesting it gets. If you enter details about your house, for example, it will calculate how much the property will be worth by the time you die. You can even compare your budget to others to see how your spending habits stack up.
MoneyVista originally cost £8 a month but this fee has been dropped for a limited period so it's a good time to give it a test run.
One for the children
Financial education should start early, and if you want to prepare your children for their future, financial or otherwise, you invariably need to think digital – there's little use teaching them about systems they won't be using when they become adults.
With pktmny.com parents can set up an account for their child (aged eight to 16) and arrange to pay in their weekly or monthly pocket money. Your child gets a bit of independence and can use a contactless, prepaid VISA debit card to spend that money, but as the parent, you can set strict parameters.
The fees are a bit of a sting: you pay a one-off £5 to join and an ongoing £1 monthly membership per child, with ATM charges on top at 50p in the UK and £2 abroad.
This aside, you do have ultimate control and can decide how much is spent in a single transaction and per week, as well as whether the card can be used in cash machines, or on the internet. Your child can also create savings goals and wish lists, with relatives and friends able make occasional payments to help them reach their targets.
Independent Partners: Search our directory to find Independent Financial Advisers (IFAs) who have been rated and reviewed by their clients. Find out more
- 1 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 2 Mystery man who gave mum heart-warming note on train 'wanted to put a smile on her face'
- 3 Michelle Obama highlights harsh restrictions faced by Saudi women after meeting King Salman without wearing a headscarf
- 4 Mafia's wall of silence broken: Victim of Cosa Nostra's extortion rackets in its Corleone heartland co-operates with authorities for the first time ever
- 5 Amal Clooney gives excellent answer to fashion question at European Court of Human Rights
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
Greece elections: Syriza and EU on collision course after election win for left-wing party
British Muslim school children suffering a backlash of abuse following Paris attacks
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
iJobs Money & Business
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...
Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...
£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...
Day In a Page
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village