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Finance
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saving and given the current low interest rate environment, it is no surprise. It also seems as though saving via insurance based policies is also falling out of favour, quite possibly due to these policies not being able to deliver the kind of returns they once did. Nowadays, although it is still possible to take out a combined life insurance and investment linked savings plan, there are also possibilities to segregate these into pure life policies and pure investment plans. Generally, one can take financial advice on their needs for protection, and discuss life cover plans that also include critical illness cover with their financial advisers. They can then focus on their savings needs separately and will have access to a much larger variety of savings and investment options, one of which is an investment platform.
An investment platform is an online service which allows you to buy, sell and hold funds, it is essentially a one-stop shop for those who wish to trade funds, under the
supervision and guidance of a qualified financial adviser. There are several benefits to having a savings plan set up through an online platform as opposed to an insurance based plan, such as an endowment. The most important of these is premium flexibility and overall cost, platform fees are generally far less expensive than taking out an endowment policy which will allow the potential for your money to grow faster. Instead of commission, these product fees tend to be very transparent and simple to understand.
Plug and play option
It is possible to set up a platform based savings plan in two ways. There is the ‘plug and play’ option, in which you will be given a choice of “ready-made”, risk graded funds or, in conjunction with your adviser, create a bespoke, diversified portfolio in line with your risk appetite and financial goals. By setting up a savings plan with an adviser, you also gain the benefit of an annual review. Your adviser
will evaluate the performance of your existing investment to make sure it stays in line with what you want to achieve, whether that is to beat the interest rate given by your bank, match or beat inflation so your money does preserve its real value or to maximise your money’s potential for long term growth.
Whichever option you proceed with, the important matter is to establish a savings habit and have a balanced financial plan that includes an element of saving from your surplus income. You cannot control interest rates or predict stock market movements, but you can control when to start saving and how much to set aside every month .
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