UPDATE: Scam Watch

BEWARE:
Cold calls encouraging a ‘Review’ of your pensions

The Financial Conduct Authority (FCA) in the UK started a TV advertising campaign about Scammers &'Free' Pension Reviews. Financial Pages in Spain advises that this is exactly how many scammers operate in Spain. The watch word is CAUTION

Be mindful that unregulated companies are cold-calling consumers to offer high-risk investment advice.

They are also sending emails, text messages and using online advertising. That was the warning in the UK but in Spain they also advertise in newspapers and it is often difficult to distinguish the regulated from the unregulated.

If you let me know, I can tell you if a company is NOT regulated. Just Email 

The aim of the 'review' is to encourage you to move money from an existing personal or occupational pension to a self-invested personal pension (SIPP) or a small self-administered scheme (SSAS).

The money is then typically invested in investments not regulated by the FCA, such as overseas property developments, forestry or storage units known as store pods.

Such investments can be enormously risky and can be difficult to sell and consumers could lose all the money they move, reducing what they have to live on in retirement.

And they also have less protection should anything go wrong and may not be able to complain to the Financial Ombudsman Service (FOS).  Again, also, the FOS does not cover advice in Spain.

The majority of companies offering the reviews are not authorised by the FCA, although some falsely claim they are acting on its behalf. Others claim to be working with the government following the Budget commitment in March to introduce a free advice service for people at retirement.

Please Note:

Financial Pages in Spain ONLY refers readers to regulated advisers. In fact I am more than happy to give you the FCA registration details of anyone I recommend. Feel free to email me to be recommended or I can check out an adviser you have concerns about. Email

Professionals

·         My doctor is qualified, works in a practice with other professionals and I trust him   without hesitation

·         The veterinary practice we take the dog to is qualified I even know where he     studied and that he is a specialist in small animal health

·         My solicitor who I have known for many years is qualified in both UK and Spain

·         I could go on but I’m sure you’ve got the message. For contact My Email

David Goodall
Financial Pages in Spain

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Hidden costs & charges

Are you paying for something you’re not receiving?

• Renewal commission

• ‘Trail’ commission

• Ongoing ‘adviser’ costs

Please note:

If you have an excellent Financial Adviser who not only did a great job for you in the first place but continues to give you service, this does not apply to you!

How closely do you look at statements you receive from your investment company or pension plan provider? Is there a charge for ongoing service by the adviser who set up the plan?

Do you receive a service from your adviser? Do you even remember who was the adviser?

Many people tell me that they don’t! So why are you paying? Well it’s in the fine print, in the Terms & Conditions which you signed. That doesn’t mean you can do nothing about it. If you don’t know if there’s a charge and receive no service you can still write to the company concerned and ask them to stop any payment from your account, plan or pension.

Financial Pages in Spain can also offer you a way out. You can ask for a review with a fully qualified, correctly regulated and professional adviser. Let us know your details, the details of your plan or policy plus the name & address of the investment company, insurance, QROPS or pension provider. If you have doubts just ask.

I hope that you have a good adviser, one you can trust and who gives you good service but I want to help you with the ones who don’t.

Just EMAIL if you have any queries

David Goodall

Financial Pages in Spain

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Additional reading:

·        Unauthorised Advisers

·        Readers’ Favourites

·        Foreign Exchange – Beat the Bank

Explaining terms and expressions - Mortgages

Explaining terms & expressions is important but nothing beats Regulated and Qualified Financial Advice

·       Cut through the jargon

·       Check Further Reading

·       Beware: Unauthorised ‘advisers’ about!

Advice
A recommendation about the most suitable mortgage for you made by an adviser. Remember that mortgage advice is regulated in the UK but not regulated in Spain. To receive a recommended adviser click here. Always be wary of advisers who want a large up front fee.

Annual statement
A statement from your mortgage lender, sent every year, showing among other things, the repayments made and the outstanding balance owed.

Approval in principle
A certificate which some lenders will give you that shows the amount they will probably be prepared to lend you. This is not a guarantee, but can be helpful when signing up with estate agents. Since the advent of the credit crunch, these are much more difficult to obtain.

Buy-to-let mortgage
A loan taken out to buy a property which is intended to rent to tenants.

Capital
The amount available to borrow, or borrowed, to help buy the property.

Capped mortgage
A mortgage that has a maximum limit on the interest rate to be paid during a special deal period.

Cashback mortgage
A mortgage that comes with a cash sum (often a percentage of the amount being borrowed).

Deposit
The amount of money being put into buying a property (not including the mortgage money being borrowed).

Discounted mortgage
This has a discounted variable rate of interest for a set period, after which the rate will increase.

Early repayment charge
A charge payable if the mortgage deal is settled ahead of time.

Fixed rate
An interest rate that is fixed (i.e. it doesn't move up or down) for a set period of time.

Income multiples
The factor by which earnings are multiplied to find out how much can be borrowed.

Interest
The charge made by lenders to borrow the money.

Interest rate
The figure that determines how much interest is paid. 

Interest-only mortgage
A mortgage where you only pay the interest charges of the loan each month. This means you are not reducing the loan amount (or capital) itself, and this will need to be repaid in some other way.

Loan-to-value
The percentage of money you want to borrow compared to the cost or value of the property.

Mortgage
A loan which is secured against the property.

Mortgage broker
A mortgage broker helps clients to understand the various mortgage types and deals available. To receive the recommendation of an excellent Mortgage Broker please email me.

Remortgaging
The process of changing your mortgage for a different one, without moving home. In the right circumstances this might be done to find a more competitive arrangement.

Repayment mortgages
A mortgage that pays off both the home loan and the interest at the same time.

Standard variable rate mortgage
A loan at the lender's normal mortgage rate – i.e. without any discounts or deals.

Secured Loan
A mortgage is a secured loan. This means that if you fail to repay it, your lender may be able to sell your home to get its money back.

Survey
A report on the condition of the property being purchased.

Tracker mortgages
A mortgage with an interest rate that is usually linked to a particular rate that is set independently from the lender and moves up or down with it. The most common tracker mortgages in Spain are Euribor linked. Euribor is the wholesale money market for Euros.

Term
The length of the mortgage.

Valuation
A brief inspection, for the benefit of the lender, of the home being purchased. This is to make sure they are not lending more than the property is worth and that the property is suitable security for the mortgage. It also checks that the property exists!

Please remember that in Spain, unlike the UK, mortgages are NOT regulated products. This means that that you must be careful who advises you. If your first instinct is to use a bank then you will not get advice, merely a product sale. Maybe a comparison from a recommended adviser. Please email me for a contact.

Explaining terms and expressions - Investments

Explaining terms & expressions is important but nothing beats Regulated and Qualified Financial Advice

·       Cut through the jargon

·       Check Further Reading

·       Beware: Unauthorised ‘advisers’ about!

Asset allocation

This is the spread of investments across the asset classes.

Asset classes 

The underlying investments – for example, shares, bonds, property and cash deposits.

Bonds These are loans made to a company (often called Corporate Bonds) or the Government (often called Gilts).

Capital
The money you invest.

Capital growth
Any increase to your original investment after costs, charges and depreciation have been taken into account.

Collective investment scheme
A way of pooling contributions from lots of people into a single investment fund.

Contracts for Difference (CFD)
An agreement between two people to settle at the close of their contract the difference between the opening and closing price of a company's share price.

Cooling off period

A cooling off period is defined as the period of time you're allowed, after signing an agreement, to cancel it without incurring a financial penalty. This does not normally apply in Spain.

CNMV

Comision Nacional del Mercado del Valores is the principal financial services regulator in Spain and responsible for authorising investment products. A CNMV adviser can be recommended, please click here

Coupon
A bond's fixed rate of interest as a percentage of its nominal value.

Debt securities
Another name for a bond.

Derivatives A right or an obligation to buy or sell another type of asset – such as a share or a bond – to someone else at a specific date and time in the future.

DGS

Direccion General de Seguros y Fondos de Pensions is the Spanish regulator for insurance products which can be marketed in Spain. Email me to be referred to an authorised adviser.

Diversification
Spreading your investments across different asset classes, or different types of investments within an asset class

Equities
This is another name for shares in companies.

Friendly Societies These are similar to mutual life assurance companies but with different tax rules.

FCA 

The Financial Conduct Authority - the UK's financial services regulator.  For a recommended adviser click here

Gearing The use of borrowing potentially to increase the amount you get back, but can also increase the risk.

Gilts

These are bonds issued by the Government.

Gross

Before tax has been deducted (as opposed to 'net', which is after tax has been deducted).

High-yield bond funds
The same as bond funds but investing in higher-risk bonds that offer a higher interest rate.

Investment or Insurance Bonds
These are pooled investments or lump-sum life-assurance investments. They can also be called Life Assurance Bonds and With-Profits Bonds.

Investment Trusts
A pooled investment. The investor is buying shares in a company that invests in other investments. The Investment Trust has shares and is quoted on the stock exchange. It is a closed-ended fund as there are a set number of shares available

ISA
Individual Savings Account is a UK tax-efficient way of saving or investing, with limits on how much you can pay in each tax year. These are not available to UK non-residents.

Life assurance investment
A pooled investment offered by a life assurance company.

MiFID

Markets in Financial Instruments Directive is the EU legislation which covers investment intermediaries and their activities. It also enables, for example FCA approved advisers to be' passported' into other EU countries such as Spain

Net asset value (NAV)
An expression used with investment trusts to mean the value of the fund's underlying assets.

Nominal value
Sometimes called the face value; this is the cost of the bond when it is issued and the amount you get back at the end of the term.

OEIC

Open-Ended Investment Company, this is a type of open-ended investment fund.

PEP 

Personal equity plan – a wrapper for investments. No longer available as all PEPs have now automatically became stocks and shares ISAs.

Pooled investments
A way of putting various levels of contributions from lots of people into a single investment fund. There are different types and they work in different ways.

Rate of return
This is the change in the value of your investment taking into account both income and growth.

Rating
This is a formal opinion of an organisation's investment quality and credit risk.

Redemption date
Usually associated with gilts or bonds, it is the date (set in advance) when the gilt or bond will be repaid by the issuing government or company and you will receive the nominal value of the bond.

Shares
These are the stake or share in a company.

Stocks

These are often linked directly to Shares, but have the same meaning.

Tax year
In the UK, the tax year is from the 6thApril in one year to the 5th April in the next year. In Spain the fiscal year is the same as the calendar year

Unit trusts
A pooled investment, which is an open-ended investment that gets bigger as more people invest and smaller when they take money out.

With-profits funds
A type of fund available within a life assurance investment. The investor shares the return from these investments and the profits and losses of the company (if it's a mutual) or the with-profits business fund (if it's a plc).

Most Investment Advisers, including the ones that I recommend, will be happy to cut through the jargon. Email me for a recommendation.

David Goodall

Financial Pages in Spain

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