Month: July 2021

Insurance
ArticlesInsuranceRisk Management

A Closer Look at the Real Benefits of Getting Insured

Insurance

A lot of people often overlook the importance of getting insurance, especially if they still feel fine. After all, what could possibly go wrong, right?

But, it turns out, that’s one of the reasons why you should, as no one knows what exactly will happen. Maybe you feel alive and well today, but what about tomorrow or the next day?

Insurance is beneficial. And you don’t have to wait until something happens to you to experience its perks. And what are these advantages, you say? Let’s take a close look at them, shall we?

 

Protection for Loved Ones

Many people often don’t purchase insurance for themselves as they don’t think they will need it in the future. But, apparently, even if you’ve passed on, it will still benefit your loved ones.

One of the well-known benefits of insurance is the provision of financial protection for your loved ones. Since everyone doesn’t have any idea about what’s going to happen in the future, in case you pass, you won’t have to worry about your loved ones as your insurance can help give assistance to them.

In case something happens to you, your insurance will be the one that will take care of your loved ones’ finances, depending on your plan. It’s a safety net for them, even if you’re already gone.

So, in case you still have a sibling or a child that needs financial support for their studies, you won’t have to worry as your insurance will take care of it. The same thing goes for your parents or spouse who are financially dependent on you.

 

Protection from Expenses

Nothing is certain, especially these days. You can get caught in a car accident, get injured at work, or your fire can catch fire. When this happens, it’s not always easy to finance yourself and your family, especially if the incident has stopped you from working.

The good news is that insurance can help you with such expenses. Car and home insurance, for instance, can help cover property and injury liabilities in case of expensive claims should an accident happens.

At first, some may think it’s not worth it, but over time, it can help you a lot financially. While the coverage of your insurance depends on several factors such as your insurance provider’s policy, deductibles, and your chosen plan, to name a few, you will still be able to enjoy a huge deduction for the damages and liabilities in case something happens.

 

Safe Keeping for Future

Life is full of memorable moments. And most of them require financial security for you to enjoy without worrying too much about your finances, especially the unforeseen ones. To ensure that you’re always financially prepared for whatever circumstances come, your insurance will help you.

Insurance isn’t just about the claims your family can have in case unfortunate things happen to you. Insurance can also help you secure your future, as well as your loved ones’. It can help you safe-keep your savings.

Depending on the policy of your chosen insurance, you can save up for your own future education goals, your child’s education, your health, marriage, post-retirement plans, and other milestones in your life, as well as your loved ones’.

 

Peace of Mind

Life is full of uncertainties, especially today. You wouldn’t know when you’ll get caught in an accident, contract diseases, or whatnot, which may require you to break the bank. And because of that, thinking of them even just for a bit can be a bit stressful, especially if you’re not financially secure.

It’s hard to enjoy and live life to the fullest when you’re worried about your finances and your future. Purchasing insurance, though, can help keep headaches at bay.

If you have insurance for your properties and for your health, you won’t need to worry about your finances. In case you get caught in an accident, your insurance has you covered.

If something happens to your property, your insurance can help you with the finances. And if something happens to you, and you’re the breadwinner of your family, your insurance can secure your family’s future for you.

For that reason, you won’t have to spend so much of your time thinking about what will happen to your future or to your family in case something happens to you.

Nothing is certain in the world. And if you’re unprepared, you’ll not only suffer from stress, but your loved ones may experience difficulties too if you’re not financially prepared. So, as early as now, purchasing insurance is always worth considering.

HR
ArticlesFinance

Improve HR Effectiveness With These 7 Tips

HR

Your HR team plays a huge role in the growth of your company, regardless of how big or small it is. It can either improve or downgrade your company’s performance.

For that reason, aside from paying attention to your products or services, you should also keep an eye on your human resource management. If it needs some improvement, here are some things you can do to boost its efficacy.

 

Automate Payroll

Your HR team already has a lot of things in their hands. One of them is managing the payroll. But, unlike other tasks, this one can take up so much of their time if done manually. No matter how much they love numbers, it can still take a toll on them. Filling up the necessary forms can already be exhausting alone.

Manual tasks like managing the payroll not only eat up a lot of time. It can also negatively impact your HR team’s energy as it also consumes effort. Plus, it can affect their tasks as it can be time-consuming.

To help your HR team manage your payroll better and be able to attend to other tasks at the same time, one of the things you can do is automate your payroll.

Through this, your HR team won’t have to manually manage your payroll. With features like a payroll record keeper, calculator, and more, everything will be easier. You can also stay updated with the tax laws.

With this, your HR team won’t need to spend so much time calculating, filling up forms, scheduling, recording, etc. Because with a few clicks here and there, everything will be done right away, helping you pay your employees and your taxes on the dot.

 

Use Onboarding Tools

Aside from payroll management, onboarding is also one of the many tasks of the HR department that can take up so much of their time. Scanning hundreds or even thousands of resumes alone can be time-consuming.

Even welcoming new hires requires some of their time. You need to introduce new hires to your company, show them around, provide training, and more.

Onboarding can be a bit demanding for your HR, but it’s easier to manage if you utilize onboarding tools. With this, finding the right talent for the position will be faster.

You also won’t have to spend too much time guiding your new hire in person, as onboarding tools come with features where you can easily allow your new hires to see the directories of your company.

 

Communicate

Communication is key to a good relationship. And yes, it’s also applicable in your work environment. If you communicate better with everyone in your company, you will understand better. As a result, you can avoid conflicts between your employees. This will strengthen the bond of everyone in your company.

Additionally, this will help your employees to perform better. Because with better communication, it’s easier to pass the specifics to everyone in your team. As a result, your employees will know what to do and what else needs to be done to keep up with your client’s demands.

With communication, you can also improve your company as a whole. Because through this, you will know where you need to improve and which areas need better strategizing.

Hence, always communicate with your team. Also, don’t forget to be open with their opinions and concerns too, as this will help you and your company grow.

 

Train

Change is constant. – and yes, even in the business world. Therefore, you should also never stop learning and always ensure to provide pieces of training to your employees, even to your HR team.

Identify your weaknesses. Then, strategize how you can overcome it. Seminars and training will help you a lot as you can get a better view of the field from experts. You can also get tips and tricks on how to do better for your business’ growth.

Sure, it may take some time and might require you to spend some costs. But, eventually, it will pay off.

 

Build a Vision

Having a vision is important for a company and for teams to succeed. This will give you, as well as your employees, a sense of purpose and direction. This will define both of your short and long-term goals. Plus, it will guide the decisions you make throughout the journey. So, think of what and how you want to see your company sometime in the future from now. 

 

Your human resource team is important. Yet, some companies tend to overlook it. Pay attention to your HR department too as they can greatly affect your company’s performance.

Finance technology
ArticlesFinance

The History of Finance and What the Digital Future Holds

Finance technology


To understand how the financial world has got to where it is, it’s important to look at the history, in order to gain context. Whilst finance has changed a lot over the years, the broad definition of it has stayed the same.

 

Where Currency First Began

The term of currency is broad, but its roots can be tracked down to the caveman, who could have given someone something they held valuable, such as a shiny rock, for some meat that another had hunted.

In truth, the definition of a transaction has largely stayed the same but has just become more open in what it defines. Eventually, as communities started to form together into bigger groups, such as towns and cities, simple trades wouldn’t really work.

In ancient times it was the Sumerians, one of the oldest civilisations in the world, who realised that they needed another method. This was because of the rise of farming, which meant most people had access to food and had it in abundance, making it pointless to trade. The leaders at the time recognised this need, and invented money to help control how society traded.

 

How the Industrial Revolution Changed Finance

Fast forward a few thousand years, and there was suddenly an abundance of new technologies that were designed to make human life easier. One of the major ones, was steam.

Steam powered technology led to steam trains, which also led to railways and transport that was capable of travelling to different countries much quicker than ever. As you can imagine, this made communication and business more organised, as they could meet quicker and make transactions quicker than ever.

It was around this time that banks started to open their doors for the first time, and with different nations trading more and more, the governments of the world started to mandate and license trading.

 

How Assets Were Important

Physical assets have been important to the financial world for a number of years. When thinking of assets, you can think of gold bars, which are often held by banks and governments in vaults to accrue interest and hold something of value to strengthen their financial capital.

Most people will hold some sort of asset, whether that be something trivial such as vintage memorabilia, or something more concrete, such as property. Property is considered a major asset, as it very rarely declines in value, usually becoming more valuable as work is done and the housing market changes.

One of the worst assets you could hold, is a new car. New cars will lose almost 30% of their value as soon as they drive away from the shop, and after a few years, could lose almost 60% of its initial value. The market of second-hand cars is flooded with stock, meaning new cars offer little value in the financial world.

 

How Digital Assets Have Become Important

Digital assets have become more important to the business world, as it can help them with influencing buying behaviour. These assets can represent a visual product or service, or just be something that you as an individual or corporation hold.

A digital asset can be defined as anything that stores content digitally. Most of the time, it will be something that holds some sort of monetary value, but it doesn’t always have to. For companies, it could be something that is only valuable to them, or it could be something that has nothing to do with them that is used to turn a profit.

Banks often hold many digital assets as of recent years. Previously, they only had vaults of physical cash, but these days they’ve turned their attention towards digital outlets such as cryptocurrencies as they see it as a one-day valuable piece of stock.

You can also get images, photos, videos or any sort of online file or document that would count as a digital asset. Throughout recent history, there have been an emergence of new digital assets. For example, MP3s almost came out of nowhere in the early 1990s, and it didn’t take them long to start dominating the digital space and be shared amongst people.

You can identify a digital asset in three main ways. The first being, it needs to be purely digital, in terms of how you use it and share it. It also needs to be uniquely identifiable in its nature, and not something confusing. Lastly, it needs to hold some sort of value to whoever holds it.

There are many ways you can grow your digital asset portfolio with Unagii and their access to yields across many digital blockchains. Unagii is an automated service, so the hard work is taken off your plate as your organization’s rewards and monetary value is unlocked.

 

Fintech Explained

Fintech stands for financial technology, which as you can imagine, covers a wide range of topics. You could even explain the introduction of Fintech to thousands of years ago, when scales were used to weight money.

Of course, the technology has evolved quite a bit since then, but the core element of it has stayed the same. Aside from other ancient monetary techniques of collecting and counting money, the term became more broadly used in society in the last few hundred years, especially in the 19th century.

This was when money started to be able to move differently around the world, through telegrams or even morse code. This changed the world as it was known back in the day, as it opened up a range of different investment opportunities, and awoke people to the idea of financial technology.

It wouldn’t be long until new financial technologies started to appear in society, through something known as an ATM. Of course, these are very common now, but the first only appeared in 1967, after a switch from analogue to more digital finance.

During the 1970s, the world’s first digital stock exchange opened up known as NASDAW, as well as the society for worldwide interbank financial telecommunications, to help regulate the communication between financial institutions making international transactions.

Digital banking started to appear more commonly from the 1990s onwards, where PayPal was introduced amongst other payment systems. It wasn’t until the financial crisis of 2008, that fintech had to evolve once more.

This is where cryptocurrency was born, and smartphones started to dominate everyone’s life. This meant apps had to be built to help users navigate the financial world, this led to banks creating their own digital banking products and allowed third-party companies to have access to financial data.

The rest, as they say, is history. Contactless payments were introduced and have become a preferred method of payment, through cards, phones and even watches. 

 

What Banking Will Look Like in the Future

With many banks now looking to purchase crypto such as Bitcoin to hold as an asset, you can be sure that banking will look more digital in the future. Of course, global economies were devasted during the recent COVID-19 pandemic, which lost billions across the world due to business closures and lack of cashflow.

This has led to blockchain financial institutions becoming more popular, and this will only continue to expand. Financial technologies are predicted to become smarter, where the ways in which money is collected and managed will change and become more universally accepted across multiple platforms.

Finance
ArticlesFinance

Many UK Financial Organisations are Unprepared to Adapt to Unforeseen Challenges

Finance


Industry research commissioned by nCino surveyed 200 senior executives in financial services on their digital transformation efforts

nCino, Inc. a pioneer in cloud banking and digital transformation solutions for the global financial services industry, today revealed new research on the views of senior executives within financial institutions on their ongoing digital transformation journeys. All surveyed executives plan to increase spend or volume of digital transformation projects over the next 12 months, highlighting the importance for the sector.

“As the banking industry continues to evolve, this research highlights several emerging themes that are accelerating or playing a role in the transformation of both new and traditional financial services,” said Jennifer Geary, General Manager – EMEA at nCino. “We’re excited to see how technology is providing a foundation for change, and that investments are being planned to improve processes that can benefit both consumers and financial institutions.”

 

Transformation to meet customer demands

More than three quarters (78%) of respondents believe their organisation is unprepared to react and adapt to unforeseen challenges. Covid-19 is one such example which the executives surveyed argue negatively affected their ability to service customers. As a result, over one in three (35%) executives are focused on improving their organisation’s resilience to future disruption through implementing new agile technology.

Over half (52%) of consumers now demand a more personalised experience from their bank and, as a result, financial institutions have had to re-evaluate how they tailor the customer journey. However, almost half (47%) of executives say they do not have access to the right information to deliver an exceptional customer experience, with almost two in five (39%) struggling to unify their customer data across platforms and channels.

It is therefore unsurprising that a third (33%) of senior executives expect to increase spend on digital transformation projects that focus on improving customer retention rates. In addition, 31% of executives say establishing a strong customer experience is a significant reason for implementing artificial intelligence and machine learning tools.

 

Investment in transformation set to rise

Transforming their organisation through new agile technology is of paramount importance to all executives surveyed, whereby all state they are increasing investment over the next year.  Investment levels, however, vary. Over a fifth (22%) are looking to increase spending between £1 million and £5 million over the next 12 months. A slightly larger number of respondents (28%) are expecting a £500k-£1m increase. Despite spend increasing across the industry, cost pressures are the main barrier organisations face when looking to implement new technology.

 

Speed at the heart of transformation projects

Improving the speed of delivery of products is the main factor (40%) driving increased spend in digital transformation projects. With customer satisfaction now a top priority and the demand for loans rising during the pandemic, it is paramount that organisations overcome delays in updating their product offerings. For example, when making lending decisions for customers, over a quarter (26%) of senior executives struggle to make timely decisions. The CIBLS loan scheme, which supported U.K. businesses to stay afloat throughout the pandemic, highlighted why it is so important for the loan approval process to be fast to benefit both the economy and customer satisfaction.

 

Transformation benefits are not clear

There is a lack of understanding of the benefits new technology can bring to financial institutions; in fact, 31% of respondents state this is the main barrier for implementing it within their organisation. It is therefore unsurprising that over a quarter (28%) of senior executives feel there is a lack of internal knowledge or expertise around the benefits of new technology and therefore, limited internal desire for new projects.

 

Transform for good

Nearly half (44%) of financial organisations are adopting technology to respond to environmental, social and corporate governance (ESG) trends. In fact, a third of executives (33%) are looking to increase spend on digital transformation to improve their organisations’ ESG efforts. Other areas organisations are focusing on include the reduction of paper consumption (42%), travel (36%), and branches (27%). Over the last year, it has become evident that some financial institutions can easily continue the service provided to customers through replacing paper and regular branch visits with digital channels. This has had a positive impact on the environment and therefore, is being implemented into ESG initiatives. While only 37% of organisations are establishing carbon neutral goals, less than 1% noted they were doing nothing in response to the pressures of ESG.

“Financial institutions need to prioritise between short-term and long-term objectives and work to align their products and services with their clients’ expectations and needs. Having the right strategy is important, but so is having the right partner and technology that can offer the flexibility and agility needed to react, adapt and continue to delight clients through any unforeseen challenges or opportunities,” concludes Geary.

Crypto Bitcoin
BankingMarkets

More than Half the Nation View Cryptocurrency Trading as Form of Gambling

Crypto Bitcoin

More than half (56%) of Brits deem cryptocurrency trading as a form of gambling, according to a new study from Gamban, a software company that blocks access to online gambling sites and apps across all of a person’s devices.
After speaking with 1,007 gamblers throughout the country, the research also found that nearly half (48%) would consider stock trading a form of gambling too.
Previous research has identified that excessive trading can be linked to a gambling disorder. Grall-Bronnec et al (2017) found that addictive-like trading behaviour can be a subset of gambling disorders. Similarly, a study by Mills et al (2019) revealed more than 50% of regular gamblers have traded cryptocurrencies in the previous year and that this was associated with an increased risk for problem gambling, depression and anxiety. 
Jack Symons, CEO of Gamban, said: “The aim of this research was to help us understand whether different types of trading are considered gambling. In a world where the lure of immediate gratification through digital platforms is increasingly tempting, it’s important that we take appropriate steps to ensure our users are protected from any activities that closely resemble gambling.
“Understanding whether the content we block should expand beyond the traditional forms of gambling will allow us to better protect our users. As well as this, we can then begin to provide recommendations on reducing gambling harm.”
In the last few years – and especially during the coronavirus pandemic – online trading, including cryptocurrency trading, has grown significantly (Nefedova et al., 2020) The increase in online trading activity has resulted in the birth of new online trading platforms, larger budgets dedicated to advertising on various social media channels and an increased overall awareness of online trading. Additionally, cryptocurrency trading has seen a significant rise over the last year with many day traders “shifting their attention to more speculative assets” (Financial Times, 2021).
Jack Symons added: “The results of our research, paired with current available literature, indicates that trading and gambling share similar characteristics and that some forms of trading may be closely linked with gambling harm. 
“Problem gamblers may be at risk when exposed to different forms of online trading. More volatile forms of trading, like cryptocurrency and stock trading, are more akin to betting than investing. So as of next month we intend to restrict access to platforms that offer these more volatile forms of trading to benefit the recovery journey of Gamban users.”
Gamban works with the the self-exclusion scheme GAMSTOP, and the leading treatment provider GamCare, giving those experiencing harm from gambling access to their software for free through TalkBanStop.com
Gamban also struck a partnership with Norway’s government-owned national lottery and gaming operator, Norsk Tipping, to provide its software for free to those who self-exclude.
Man in a business suit with a blue notebook against a blue background
ArticlesFinance

3 Viable Financing Options for Small Businesses

Man in a business suit with a blue notebook against a blue background

It’s no secret that traditional lenders tend to be hostile to small businesses. Things are even worse if you’re in a business with a high failure rate. Small businesses are sadly those who are the most in need of a loan. If you’re a new business and don’t believe you have the history needed to get a loan, know that there are many options out there you can choose from. It’s all about knowing where to look and what to do to be an eligible candidate. Here are a few viable financing options for small businesses.

SBA Loans

SBA loans are loans that are backed by the Small Business Administration. We say backed because you will still have to go through an SBA-approved third-party lender.

The requirements are different than with other loans, but a lot of it will rest on your personal credit score. So, this is one is something you should consider if you’re been handling your personal finances responsibly and amassed a respectable history.

If you want to access SBA loans for your business, you also have to be prepared for a long and strenuous process. It will likely take weeks before your application is processed, and you get a response. But if everything is in order and you filled your application correctly, there is a strong chance you’ll be accepted, so we suggest you look into it more in detail.

Invoice Factoring

Invoice factoring is a special type of financing that allows you to borrow money against your accounts receivable. You can borrow money against invoices that are due to you at a later date. The factoring company will take part of that money as a fee and will also collect the invoice themselves.

This is a great option for those who have very poor credit. That’s because your client’s credit, and not yours, will be used to determine if you’re eligible or not. So, if you have a lot of accounts receivable and good clients, this could be an option.

Equity Financing

Then you have the option of offering equity in your business in exchange for money. The stake in your business will usually be proportional to the money that will be put up. For instance, if you have a business that is valued at $100,000, you could ask for $10,000 for 10% of the company.

This also means, however, that you’ll be welcoming new owners on board and will have to split your profits from now on. This can be both a good or a bad thing.

If you bring in someone with expertise in areas that you need, you could end up saving money by not having to hire outside help. They might also help make your business more profitable. On the other hand, you could end up bumping heads with them and they could become disruptive. You could also become frustrated by their lack of participation.

There are also cases where you might have to contemplate giving majority control of your company. Again, this is something you’ll need to evaluate yourself about, as they may be better equipped to run a business. Many will also refuse to give the reigns to someone who doesn’t have a formal finance background, so you have to prepare for that.

These are all financing options that you could explore as a small business owner. Look at each one of those in detail and see which one would be the best depending on your situation.

Trading
ArticlesMarkets

Answering the Nation’s Top 10 Trading Questions

Trading

By Annie Charalambous, Head of Communications at ETX Capital

The past year has been challenging on all fronts, the least of which being the nation’s finances. With many furloughed or having lost their jobs altogether, financial stresses are mounting, and getting the most out of our money is more important than ever.

As interest rates sit at historic lows, people are starting to rethink just how and where they invest their savings, and trading is one such avenue that’s seen a rise in activity over the pandemic.

Over at ETX Capital, we know that making an educated decision is imperative to success, and so we’ve looked at Google search data to reveal the most common questions budding UK traders are asking, and answered them.

 

What is stock trading? (9,900 monthly searches)

Stocks, or shares, are fractions of ownership in a publicly traded company, that anybody can buy (or sell) depending on the perceived value of that business. Traditionally, you’d want to get in (buy) at a lower price and hold onto that stock until it appreciates in value for you to make a profit.

 

What is options trading? (8,100 monthly searches)

Options are financial contracts that give their holders the ability – but not the obligation (hence option) – to buy or sell a security for an agreed-upon price on a set date, thus hedging against the risk of fluctuating market prices.

 

What is a CFD? (6,600 monthly searches)

A CFD, or Contract for Difference, is another type of trading contract, whereby you are speculating on the direction an instrument may move in, without owning the underlying asset.

You are therefore trading on the price fluctuation – “buying” if you believe its value will increase over time, or “selling” if you anticipate a decline.

 

What is forex trading? (5,400 monthly searches)

Forex, coming from foreign exchange, refers to the buying and selling of different currencies to profit from the difference in their values. The forex market is the largest in the world, seeing over $6 trillion a day in volume – everyone from holidaymakers to big banks partake in the FX market.

 

What is leveraged trading? (5,400 monthly searches)

Leveraged trading works in such a way that a retail trader can open a larger trade with less capital, with the broker putting up the rest of the balance (i.e., the leverage).

Having larger position sizes means your exposure is higher, resulting in bigger returns and conversely, bigger losses.

 

What is futures trading? (2,900 monthly searches)

Futures contracts work in such a way that two parties – a buyer and a seller – agree to exchange an asset on a fixed future date, with the profit (or loss) realized at the time of exchange.

Your profit or loss is realised at the time of the exchange, depending on how the price has fluctuated since the order was placed.

 

What is scalping? (2,900 monthly searches)

Scalping is the act of placing trades you intend to keep open for a very short amount of time, ranging from a few seconds to several minutes, to capitalize on high volatility or sharp spikes in the market.

While there are brokers that may allow scalping in some capacity, it is a form of market abuse if done frequently.

 

How to trade stocks (2,400 monthly searches)

As with any investment, research is the first step.

From choosing the right broker (you’ll want to consider fees, liquidity, selection of stocks, and of course, reputation) to finding the right markets to invest in, you should always know why you’re investing in a particular stock.

Some factors worth looking at may include analysts’ projections for stock performance, the company’s financial results (or earnings), published quarterly, as well as the dividends it pays out.

 

How are commodities traded? (2,400 monthly searches)

Commodities are, typically finite, physical products that have a fluctuating value. There are both hard and soft commodities, ranging from gold, silver, oil, and other natural resources to the likes of coffee, wheat, corn, and even orange juice.

Their value is dependent on supply and demand and can be influenced by anything from weather to politics.

 

How to trade cryptocurrencies (1,900 monthly searches)

Like forex and stocks, cryptocurrencies can be traded as either CFD products or bought and held in a virtual wallet. While more volatile than other traditional assets, cryptocurrencies can be a profitable investment if, like any instrument, you get in at the right time.

When trading crypto CFDs, you can short or sell, meaning you can profit from the drops and not just a rise in value.

Investment Portfolio
ArticlesFinance

Different Types of Investment Portfolio

Investment Portfolio

Whether you are new to the world of investing or just looking to diversify your holdings, there are a number of key decisions that must be made. One of the first being which type of portfolio is most likely to suit you during your investment journey. Continue reading to familiarise yourself with the different types of investment portfolio and how to choose the right one for you.

 

Aggressive

Aggressive is one of the most common types of investment portfolio. It seeks out large returns and the high risks associated with investing in them and tends to favour capital appreciation over safety. The type of strategies associated with an aggressive investment portfolio will usually allocate a large number of assets to stocks and little to none in bonds or cash-based investments. They are suited to young adults with small portfolios. This is due to the fact that young investors can sustain market fluctuations and losses much more easily than experienced investors with a lot to lose. Most investment advisors only recommend this strategy if it is applied to a small percentage of your entire investments. If you are looking for a high risk portfolio with an equally high return on your investment, it may benefit you to check out the Golden Butterfly Portfolio.

 

Retirement-blended

With interest rates continuing to decline, the traditional retirement portfolio is almost obsolete. Retirees must lay the groundwork and take the appropriate steps towards building a substantial retirement fund decades in advance. With life expectancy rates surging across the globe, this is now more important than ever. If you are an investor nearing retirement age, you may benefit from a blend of both income-oriented and growth-oriented investments. A common example is stocks and bonds. By taking a step back from alternative investments and sharpening your focus, you can generate long-term growth that is much more likely to grow in line with inflation. This increases your chances of receiving a relatively constant return on investment and softens the blow of equity deteriorations over time.

 

Income

When you invest, your returns can be relayed to you through dividend pay-outs or stock price appreciation. An income investment portfolio is the name given to a portfolio that consists primarily of stocks that pay dividends. Income portfolios tend to generate positive cash flow. Examples of investments that produce income include real estate investment trusts, or REITs, and master limited partnerships, or MLPs. A real estate investment trust, in particular, is a great way to invest in real estate without the commitment of actually owning a property outright. A master limited partnership, on the other hand, is a limited partnership that is traded publicly on an exchange. These companies will pass on a large percentage of their profits to shareholders in exchange for positive tax status. Income investment portfolios can be a handy way of diversifying your current income sources and supplementing your existing retirement fund.

 

 

Speculative

If you are looking for a high risk investment portfolio with high returns, a speculative portfolio may be the best option for you. It is commonly compared to gambling and involves a much greater degree of risk than most types of investment portfolio. Speculative investments focus on market fluctuations and movements. Most speculative investors are uninterested in the fundamental value of an asset or the annual income it may generate. They tend to focus on how much they can sell it on for at a later date. Examples of speculative investments include real estate, stocks, currencies, fine art, currencies, commodities, and collectables. They may also include Initial Public Offerings, or IPOs, and healthcare or digital technology firms in the process of developing a cutting-edge product or service. Most investment advisors tend to recommend that no more than 10% of an investor’s assets are used to fund a speculative investment portfolio.

 

Hybrid

As the name suggests, a hybrid investment portfolio involves a combination of a number of different investments. It offers the greatest level of flexibility and versatility compared to other types of investment portfolio and typically includes bonds, commodities, real estate, and perhaps even fine art. As with income investment portfolios, a hybrid investment portfolio may also include real estate investment trusts and master limited partnerships. Typically, hybrid investment portfolios contain both stocks and bonds and are diversified across multiple assets. This allows investors to balance both risk and return and establish an investment portfolio that suits their own individual needs and requirements. It is also a great option for first-time investors as it exposes them to equity and tends to be relatively low risk.  

 

When it comes to investing, there is a lot to learn. One of the first factors to consider is which type of investment portfolio to opt for. From aggressive and retirement-blended to income, speculative, and hybrid, there is guaranteed to be one out there to suit your knowledge and experience of the investment market.

Two building contractors signing an insurance agreement
Recovery
ArticlesBankingMarkets

New Global Data on Bank Customer Behavior Shows Travel is Poised to Recover Faster than Expected

Recovery
  • Points transfers from banks into frequent flyer schemes are accelerating and trending ahead of airline passenger recovery
  • US points transfer activity already exceeding pre-pandemic level by 30%
Yesterday Ascenda, the technology company that makes banking rewarding, revealed consumer confidence in travel is returning quickly according to leading indicators from its bank solution TransferConnect, the world’s largest global exchange for frequent traveller miles and points.
TransferConnect facilitates the exchange of rewards currencies between financial services brands and a broad set of major airlines, hotel chains, super apps and retailers worldwide. The network enables banks across 40 markets to connect with 50 major merchants and delivers access to real-time points transfers for 1.2 billion consumers worldwide.
The newly published data is the first of its kind ever released in the industry and showcases how rewards currency exchange volume from banks into frequent flyer schemes has compared against airline Revenue Passenger Kilometers (RPKs) over the past 18 months. The analysis provides unique insight into how the multi-billion dollar bank rewards value chain has been impacted by the pandemic and where travel recovery is heading in coming months.
When COVID-19 first brought global travel to a standstill in March 2020, bank consumers naturally ceased to transfer their accumulated points into frequent flyer miles. Both RPKs and rewards transfers plummeted more than 80% during a 60-day period.
However, customers continued to earn bank rewards unabated on their everyday card spend as the pandemic unfolded, with growing points balances waiting to be redeemed. The year 2021 then brought the turning point, as news of global vaccination progress unleashed pent up travel aspirations and prompted a reinvigoration of bank point conversions into frequent flyer schemes. Since March 2021, that transfer activity has accelerated its recovery materially ahead of passengers carried. The effect is consistent across geographies and especially pronounced in the US market, where the volume of bank points exchanged into frequent flyer miles has actually surpassed pre-pandemic levels from April 2021 onward and is still continuing its upward trajectory.
In addition to these strong signals of returning consumer confidence in air travel, the analysis also reveals that hotel chains have capitalized on the pandemic to sustainably grow their share of global rewards currency transfers. Following the onset of the crisis, transfers into hotel points had naturally gained relative share as consumers were forced to opt for local vacations. Hotel points represented less than 10% of currency transfer volume in 2019, increasing three-fold in March 2020 to 30%. What’s most remarkable, however, is that the behavior change has persisted into 2021, even during the recent months of recovery, indicating that the chains have sustainably grown their level of engagement with loyalty program members.
Sebastian Grobys, Chief Commercial Officer at Ascenda, said: “As the pandemic unfolded, the world’s eyes were glued to plummeting operating statistics published by airlines and travel industry bodies across the world. Since then, there have been many attempts to analyse the slope of the recovery curve and make predictions about the future, for example looking at forward booking patterns. Today we’re excited to contribute a new and unique source of data that shows frequent flier mile transfers are rising significantly in a strong signal of accelerating recovery.”
Woman chatting online with a laptop
ArticlesInfrastructure

Best Service Management Conversational Tech Company 2020

Woman chatting online with a laptop

 

Increasing productivity and efficiency for its clients, Aisera’s cloud-native management software is becoming the go-to option for companies across the board. With a vast array of capabilities that is only growing, its work is one of the most exemplary when it comes to intuitively automated personal interactions. 

 

Aisera’s AISM Architecture is a fully optimized team management service that is completely cloud enabled and fully end-to-end. Using a single AI platform across a multitude of services and allowing the accomplishment of multiple tasks all supported by the same software, it is multi-function and an invaluable business tool for the streamlining of processes across the board. Aisera provides service automation and empowers its clients to operate faster and more accurately. Improving business uptime, improved productivity, cost reduction, and consumer-like self-service for employees and customers, it cuts down on the manpower needed to handle basic processes and in-house operations by automating those with an intuitive and teachable AI interface. 

 

With Aisera, a client can turn their business into a high-volume resolution engine that is scalable to their business. This is one of the ways in which it makes itself highly cost effective, as its product can be scaled to match any company and their operations, ensuring that no client receives something too big or too small to handle what they need it to. Its self-service resolutions are quick and accurate, whilst allowing both customers and employees to enjoy a personalized and proactive AI service experience. In this way, it seeks to go against the notion that AI query resolution programmes are impersonal and clunky, ensuring its solution is empathic and well-designed. The platform itself is efficient and organized, allowing all encompassing AI Service Management that drives an efficient and automated service experience. Based on the principles of conversational engagement and workflow automation, it gives all users direct access to the tools their need to be more productive easier. AI and RPA solutions handle the direct interactions with end users. 

 

These programmes are concierge-grade, and with the technologies behind them being top of the range, they can help with everything from HR and sales to customer service and internal operations. Furthermore, AI Service Management integrates seamlessly with existing ticketing systems, knowledge bases, call centres, and customer service processes to automate those resolutions in a matter of seconds. Programmed with the ability to understand intent, sentiment, and ambiguous messages that other AI solutions find difficult, its clients and their end-users find themselves impressed by Aisera’s digitized multistep employee conversations. This has been especially pivotal in the past year with the advent of a majority work from home culture. Without the ability to simply cross an office and ask a colleague, Aisera’s services allow them to get an answer quickly and efficiently without having to wait for a co-worker to be available to chat. 

 

Aisera’s services also learn quickly and efficiently, picking up on nuances and working practices exclusive to the company it is managing so it can adapt to them. Aisera combines user and service behavioural intelligence with supervised and unsupervised NLP, NLU, and NLG in order to do this. Furthermore, it connects to existing systems, tailoring itself to work with over 400 different connections such as ITSM, CSM, Alerting, Monitoring, Chat Provisions, and RPA. It is also both no-code and cloud-native, requiring no additional resources or onboarding for getting it set up – it just works. Aisera also offers clients the option of improving productivity by use of its catalogue of over 1200 pre-built workflows. With all this in mind, it’s no wonder Aisera has become the trusted AI integration platform for so many businesses, and it looks forward to helping streamline the work of many more businesses in
the future.

 

For business enquiries contact Kim del Fierro at AISERA vai aisera.com

Fintech Banking
ArticlesBanking

How is Fintech Transforming Banking in Central Asia?

Fintech Banking


By Abdullo Kurbanov and Zuhursho Rahmatulloev, co-founders of Alif

When we think about the markets driving the financial technology (fintech) revolution, London, New York and San Francisco immediately spring to mind. In many ways, it makes sense for these cities to be at the forefront of fintech innovations. Each of these cities accommodate diverse pools of financial and professional service specialists, attract significant investment, and boast world-leading digital infrastructure.

Since 2015, challenger banks and fintech companies have launched in these locations, offering new products and services that seek to transform consumer finance and retail investment. In doing so, they are collectively helping to empower society through digital solutions. 

While it is important to acknowledge the fintech ecosystems in advanced economies, we should not let these overshadow some of the exciting developments currently on display in emerging markets. Regions like Central Asia are on the brink of what we deem to be a “fintech revolution”, led by a new generation of fintech companies. Importantly, these companies are taking an agile approach by addressing localised issues through the creative deployment of technology.  

Tajikistan is one such country in the middle of a profound digital transformation. With the aim of achieving better financial efficiency and inclusion gains, the country’s fintech industry is helping to digitally empower its citizens. Moreover, at the regional level, by applying tech to address the current banking challenges faced by people based in Central Asia, such as remittance payments and Sharia-compliant fintech platforms,  the Central Asian region is set to become a global leader in Shariah compliant fintech.

 

International remittances

Admittedly, a core driver of economic development in the Central Asia region is remittances. Over the years, the mass migration of people to Russia from Tajikistan, Uzbekistan, Kyrgyzstan and some other former Soviet Union countries has resulted in economies that rely on remittances as one of the core contributors to GDP. According to the World Bank, remittances accounted for 33% of Tajikistan’s GDP in 2019 – equating to $2.5 billion. In Uzbekistan, personal remittances received in 2019 totalled 14.75% of GDP.

Remittances do play an important role in supporting domestic households and ensuring countries are positioned to achieve the Sustainable Development Goals. However, the complexity and costs involved in arranging these payments can lead to people paying extremely high fees. Banks and money transfer operators (MTOs) are typically responsible for managing such payments. The costs arise when these operators need to engage with several intermediaries, not to mention the margin on the exchange rate. 

Research by the World Bank concluded that COVID-19 has led to a decline in remittance payments in Europe and Central Asia; a consequence of weak economic growth, currency depreciation and unemployment in migrant host countries.

It is here that fintech models can drastically reduce the costs involved in such transfers while also providing greater transparency over how the payment is managed. It is estimated that if every remittance payment made in 2018 to the Europe and Central Asia region had been facilitated through Fintech models, consumers could have collectively saved US$1.59 billion.

These cost savings arise from the lower transfer costs and fees when compared to traditional operators. The payments can also be arranged instantaneously, which ultimately reduces the chances of individuals looking to informal, high-risk avenues of transferring finance.

Evidently, fintech can have important distributional effects by supporting those who rely on remittances. By making the process cost-efficient and transparent, consumers can significantly reduce the amount of fees and costs paid for any type of remittance transfer.

 

Empowering the region with Islamic fintech

With most people in Central Asia identifying as practicing Muslims, the region is ripe for the growth of modern, technologically enhanced Islamic banking. At the core, Islamic finance is based on the principle that money does not have an inherent value. Instead, it is seen as an instrument used to exchange products and services – things that do have value. Islamic finance also prohibits interest payments. In other words, people should not be able to make money from money.

However, there is so much more to Islamic fintech than simply ensuring the core beliefs of Islamic finance are integrated into fintech platforms. Considering the sustainability and development goals of Central Asia, the fact Islamic finance promotes risk sharing, encourages financial inclusion, and is focused on social welfare outcomes, ensures it can play a positive role supporting the economic progression of the region. The provision of Sharia-compliant banking through fintech solutions not only improves the digital capabilities of the region but contributes to broader social and economic goals.

 

Creating a digital ecosystem in Central Asia

Digital connectivity is a key enabler of economic productivity, growth and market innovation. As more and more services are offered online, there is a need to ensure that everyone around the world is digitally enabled. Despite this, the World Bank estimates that nearly half of all people in Central Asia are not digitally connected. This is a concerning figure, highlighting the need for a long-term strategy which directs investment into the infrastructure and skills needed for the region to have internet access.

Private and public sector cooperation is needed to facilitate this digital transformation. For example through ongoing consultations and meetings between public bodies, and local companies at the helm of digital innovation. A digital ecosystem needs to be created, and fintech companies can assist in two practical ways. 

The first is through the practical deployment of accessible technologies that assist with people’s daily financial needs. From consumer and retail financing, such as buy now pay later (BNPL), point-of-sale financing through to transparent online channels that facilitate cross-border currency transfers, fintech companies are ensuring the development and proliferation of technology that practically address the common needs of those based in the region.

The second way is through education, skills and training. Digital literacy empowers individuals, and this can only be achieved if people are encouraged to pursue education that betters their understanding of technology, particularly when it comes to finance. For growing fintech companies in the region, it makes sense to implement academy programmes to create a skilled workforce. Such education programmes will also provide the inspiration needed to support a new generation of tech entrepreneurs keen to learn how to programme, thereby reducing the factors that might tempt younger generations to move outside of the region.

 

Fuelling growth and innovation through tech

Fintech is naturally positioned to help empower Central Asia and support the digital transformation of the region. From offering an easier and more accessible way of managing remittance payments through to the provision of Sharia-compliant services and financial education, fintech will be integral to the economic advancement of Central Asia. Importantly, fintech companies are heeding the call with companies like Alif applying the latest technology to ultimately improve the way people can manage their finances.

Based on what we are seeing unfold now, Central Asia could establish itself as competitive global hub in fintech innovation through the release of platforms, products and services that support issues typical to the region, particularly when it comes to Islamic finance. For these reasons, we are optimistic about the future prospects of fintech in digitally transforming Central Asia in the coming years.

Abdullo and Zuhursho - ALIF
Abdullo Kurbanov and Zuhursho Rahmatulloev, co-founders of Alif
Investment small business
ArticlesFinance

Investment in Small UK Firms Booms Despite Covid

Investment small business


By Luke Davis, IW Capital.

New data from the British Business Bank has revealed that UK smaller companies received a record £8.8 billion of equity investment in 2020 despite the disruptive effects of both Covid and Brexit. This record growth looks set to continue in 2021, with £4.5 billion of investment reported in the first three months of the year already, while our own research at IW Capital – where we provide vital growth finance for SMEs – reveals that 16% of UK investors are looking to back startups and SMEs in 2021.

The figures come from the British Business Bank who first started to track this form of investment over ten years ago. The Bank was also a key contributor to this record, supporting over 20% of all UK equity in 2020 – the majority of which involved the newly launched Future Fund.

The Fund, launched in May 2020, provides convertible loans, ranging from £125k to £5m to eligible investee companies. Technology and IP-based businesses have so far made up around 40% of the companies receiving investment, with Business and Professional services following at 26% of the firms. This still leaves, however, a significant portion of the market if not uncatered for then certainly under-funded – a chronic problem for UK businesses over the past decade.

SMEs are a vital sector of economies the world over, but especially so in the UK, where firms with fewer than 250 employees contribute over £2 trillion to the economy. They make up 99.9% of private sector businesses and employ around 60% of the workforce, and as such are crucial to the UK economy and its growth. This is a significant portion of the overall GDP and much of it is spent in local communities – something which has come to the fore during the pandemic.

Considered in tandem with the fact that before the pandemic, small firms were hiring at a rate three times higher than large companies, this evidence demonstrates just how powerful SMEs will be in tackling potential unemployment as a result of the end of furlough.

Investment in small firms also almost always comes with advice, guidance and an outside perspective that can prove invaluable to a business looking to grow, scale or simply survive – especially in the current climate. Through angel investment and other forms of private finance, entrepreneurs are offered advice, connections and introductions that can make the difference between success and failure or scale and stagnation.

This investment support comes at a time of record optimism in the SME sector, with three quarters of CEOs expecting overall economic conditions in the UK and Ireland to improve over the course of the next 12 months. The combination of optimism and investment backing could spell a perfect storm for growth in the sector that is so vital to the UK economy.

The economy in 2021 is already heating up, with it set to return to pre-pandemic levels by the end of the year, and its continued growth will be fuelled by the small businesses that provide its foundation.

The record level of investment reported in 2020 is great news and – from our experience through the last year and a half – not at all surprising. There has never been more demand to support SMEs and startups in their growth journey, whether that be through the Enterprise Investment Scheme or any other route to provide funding, and the trend is by no means over.

Our research indicates that a significant proportion of the UK’s investment community are actively investing in these firms. Opportunities in this sector exist not only for great returns but also to make a real difference in the life and growth of a business. something that is becoming more important for investors as they adopt a more altruistic approach.

IW Capital invested in at least six different growth SMEs during 2020 and the majority of them have grown at a rapid pace thanks to our support. The growth of these businesses ranges from sustainable packaging that pivoted to produce plastic-free PPE, to apps making seamless hospitality service possible during a pandemic. The unifying elements they all possess are passion, determination and talent, all qualities that the UK entrepreneurial sector has in spades.

Managing Finances
ArticlesFinance

How to Manage Your Finances More Effectively?

Managing Finances


Even if you think that your salary is not that low, you might routinely discover that for some reason, you have underestimated your monthly spending. Although you are not the only one, it doesn’t mean that you shouldn’t put plenty of effort to ensure that you have some savings that could be much needed when something unexpected happens.

It might be easier said than done, but it doesn’t mean that you are fighting a losing battle. In a moment, we’ll explain how to manage your finances more effectively so that you can live a more stress-free life. It will require a fair bit of self-discipline, but it’s worth the effort.

 

Pay off Your Debts

Once you have determined how much you spend on each category and have set up a budget plan that makes sense for you, make sure that you stick to it and don’t deviate from it unless necessary. If there are expenses that seem unreasonable or unnecessary, try to cut down on them and see how much money could save over time.

If there are any debts that need paying off urgently, then pay them off as soon as possible before they take over your life completely. If the amount you owe is too much for you to repay on your own, you can always consider getting a personal loan, such as the one offered by societyone.com.au. On top of that, consolidating several loans into a single one can help you pay off your debt faster.

 

Track Your Spending

In order to determine your spending habits and see where your money goes, we recommend that you track each and every expense you make. If you are going to use a budgeting app, it will be recorded and calculated automatically. A paper-based system will require more manual work on your part. If you want to be more organized, don’t forget to include recurring expenses such as electricity/water bills, insurance premiums, etc., in your monthly plan.

 

Make a List of Your Expenses

Once you have determined how much you spend on average monthly, you can start making a list of all the things you spend money on. If you are not tracking your expenses, you might have overlooked some of them, while others might appear to be unreasonable. For example, it doesn’t really make sense for a 25-year-old person to spend $800 on groceries every month. This might just be the case if they live with their parents and have a very generous allowance, but it’s unlikely that they earn that much money on their own. Another example is clothing. Let’s say that you spent $500 on clothes last month. If you make $2,000 per month, then this might be a bit excessive.

There are also expenses that you might need to cut down, even if they seem like a necessity. For example, if you spend $100 on coffee every month, it might be time for you to reconsider your priorities or at least reconsider how much coffee you drink every day. Although this is somewhat subjective, we can give you an example of an excellent way to do it. For instance, if you want to cut down on coffee, try to reduce the amount of money you spend on this commodity by a dollar or two each month. Once you have done that for a couple of months, you should be able to stop buying coffee completely. This way, you will slowly start getting used to your new lifestyle, and in the meantime, you will save quite a bit of money.

 

Make a Budget Plan

Once you have determined how much you spend on each category, it’s time to create a budget plan. First of all, we recommend that you try to stick with the same categories as before, but if there are some items that you feel can be moved from one category to another, then go ahead and do it. The second thing that you should do is to look for opportunities where you can cut down on spending without significantly reducing your quality of life.

For example, if you have decided that you don’t need a car because public transportation is sufficient, then think about how much money you would be able to save by not purchasing one. If you are thinking about cutting down on your phone bill, think about how much money you can save by switching to a cheaper provider or changing your plan. This way, it will be much easier for you to stick with your budget plan.

 

Conclusion

You don’t have to be an economics expert to know how to manage your finances effectively. Still, it’s a valuable skill everyone should have! After all, you never know what will happen in the future, and if you spend your money in an unreasonable way, you may be in trouble.

If you want to develop good spending habits, you can start with baby steps. Determining what you spend your money on is a great starting point, and you can use various budgeting tools to help you with that. Ultimately, you can think about establishing an emergency fund and increasing your savings.

Close up of a welcome mat that reads
ArticlesReal Estate

Study Reveals: First-Time Buyers’ Biggest Fears

Close up of a welcome mat that reads


● Over a third of first-time buyers fear experiencing a ‘house value drop/negative equity’
● More than a quarter (26%) of first-time buyers worry they won’t be able to match their deposit saving rate to the rate of house price rises
● 11% of people fear ‘breaking up with someone after buying together’

Figures* show that there are approximately 39,000 Google searches on average for ‘properties for sale’ in the UK per month. Despite clear interest in the property market, this buying process can be particularly challenging for those getting onto the property ladder for the first time.

But what are first-time buyers really worrying about? The mortgage experts at money.co.uk surveyed 1,501 first-time buyers to discover what they are most fearful of when it came to buying their first home.

Top Five First-Time Buyers’ Fears Revealed:

Fears %
1. House value drop / negative equity
31
2. Saving enough deposit vs rise in house price
26
3. Unable to afford your mortgage long-term
22
4. COVID-19 influencing a spike in prices
13
5. Breaking up with S.O. after buying together
11


The biggest concern raised by first-time buyers is experiencing a ‘house value drop/negative equity’. In fact, 31% of respondents said they are worried about their property becoming less valuable than the remaining value of their mortgage.

Nisha Vaidya, mortgage editor at money.co.uk, said: “There are a few things you should keep in mind if you want to avoid negative equity. Firstly, it’s important to make sure you pay the market value for the property, so don’t shy away from negotiating on the asking price.

“Secondly, the larger your deposit, the more equity you will have in the property. So, if you are able to save enough, putting down a bigger deposit is a good idea.”
While putting down a larger deposit is a great way to unlock lower interest rates and better mitigate shifts in house prices, over a quarter of first-time buyers said they are worried that they wouldn’t be able to save at the same pace as the rise in house prices.

Nisha Vaidya, a mortgage editor at money.co.uk, offered these tips for saving for a deposit:
● Setting a budget: In addition to understanding how much deposit you’ll need, there are other costs to consider when purchasing a home, such as survey costs, solicitor or conveyancer fees and insurance. But by setting a budget, you’ll be able to plan out your savings targets and start saving for your ideal home.
● Cut the cost of your rent: You’ve probably asked yourself the question ‘How to save money for a house’ multiple times, but one way is by paying less rent to free up more cash for your deposit fund. If you live alone, consider moving into a house share or living with family to save on rental costs.
● Get a lodger: If you live alone and have space, taking in a lodger can be a great way to help subsidise the cost of renting and give you extra money to save for a deposit. Before you begin your search for a new flatmate, check your landlord is happy for you to share their property and sub-let a room.

The third most common worry experienced by first-time buyers is being ‘unable to afford your mortgage long-term’ – a concern experienced by 22% of respondents. 

Nisha Vaidya added: “If you are worried about affording your mortgage, there are ways a buyer can get support. This type of support can include: a payment deferral, an extension to your mortgage term and a change to your mortgage type. If you are looking to buy a new home but have financial worries, using the Help to Buy scheme could offer you the support you need. 

This Governmental scheme offers buyers an equity loan they can use to help buy a new build home, allowing buyers to purchase a property with a 5% deposit and receive a loan for up to 20% of the property value, which will be interest free for 5 years. The buyers must then take out a standard mortgage for the remaining 75%.”

Moreover, the pandemic has affected us in many ways, and it has created new concerns in different aspects of our lives, including financial ones. The survey conducted by money.co.uk reveals that 13% of first-time buyers fear ‘COVID-19 influencing a spike in prices’.

This is not the only fear people have as a result of Covid-19. With many people becoming remote workers, confusion has arisen in regard to where it’s best to buy, in the eventuality of going back to the office. 5% of respondents have said they have concerns regarding the ‘uncertainty about location with working from home [WFH]’. 

Couples who buy together have also admitted that a big concern is ‘breaking up with someone after buying together’, with 11% of people fearing a separation could create difficulties with property related matters. 

Nisha Vaidya, a mortgage expert at money.co.uk, said:

“Getting on the property ladder can be a nerve-racking experience for first-time buyers, as being misinformed can cost greatly – whether it’s losing out on a dream home or losing a lot of money in the process. However, the best thing first-time buyers can do is do their homework thoroughly before embarking on this journey.
“Being equipped with the right information will cut the risk of encountering unpleasant scenarios that many first-time buyers fear, such as experiencing negative equity or being unable to afford a mortgage long-term. Once you are confident in your knowledge the process should be less risky and more exciting.”

Methodology
● Mortgage experts at money.co.uk conducted a survey in which 1,501 people participated. The question “As a first-time buyer, what is your biggest fear?” was asked.
● The survey sample is broken down as follows: 56.5% male respondents, 43.5% female respondents. 8.5% were aged 18-24, 19.5% were aged 25-34, 13.7% were aged 35-44, 17.0% were aged 45-54, 22.9% were aged 55-64 and 18.4% were aged 65+.
● Geographically, 77.7% of respondents were from England, 15.6% of respondents were from Scotland, 6.1% were from Wales and 0.7% of respondents were from Northern Ireland.

*Figures provided by https://ahrefs.com/.

Investment market
ArticlesFinanceMarkets

UK Investors Have Their Say

Investment market

Confidence levels are up, Millennials make their mark and interest in ethical investing hits new highs.

Confidence levels amongst UK investors have risen 20 points (62 – 82) in the last 12 months according to new research amongst 1100 UK investors (£10k+).

The Investor Index, now in its second year, is conducted jointly by London-based communications agency AML Group and research agency The Nursery Research and Planning and was launched in April 2020 to assess the immediate impact of Covid 19 on investors and the UK investment marketplace. The first report of its kind to provide an objective overview of the industry based on hard data – the study was welcomed as a barometer of post-Covid investor behaviours.

One year on, and still in the grip of the pandemic, the 2021 study has revealed some significant changes and ‘recalibrations’ amongst investors.

 

Confidence returns – but not to pre-pandemic levels

Over the past 12 months, confidence levels have risen most amongst older investors (55+) up 30 points (54 – 84), investors that are retired up 27 points (57 – 84), those that use financial advisers up 31 points (65 – 96) and investors with a portfolio of £200k+  – up 38 points (55 – 93).

The study has also revealed a disparity in gender confidence levels – with men indicating a 25 point rise over the last 12 months (61- 86) compared to a rise in confidence levels of just 10 points among female investors (65 – 75).

However whilst the results are cause for some degree of optimism – investor confidence levels are still 18 points down from pre-Covid levels.

 

Gen Z/Millennials Vs Baby Boomers – the emerging generational divide

10% of UK investors have started investing since the pandemic began – and of those new investors three-quarters (74%) are under 35s.

It’s a changing landscape with the younger investor bringing different attitudes and priorities to the investor table.

89% of under 35s have changed their investment strategy over the last year vs. 31% of 55+ investors. Younger investors are also increasingly looking to ESG products – with 27% including responsible investments in their portfolio compared to only 4% of investors aged 55 and older. Younger investors are also more focused on the long game – with 30% looking to longer term investments compared to 8% of investors 55+.

When it comes to investment decisions, younger investors are increasingly turning to family (40%), banks (30%) and friends (27%) for advice.

 

It’s a gift – investors demonstrate a change of attitude

57% of UK investors have changed their investment strategy since the pandemic started – with a focus on products offering ‘long term growth’ (46%) over ‘short term growth’ (30%).

Investors are increasingly concerned about their children’s financial security. 70% of investors are aware of the £3,000 wealth transfer allowance with 38% having given £500 or more over the last 12 months – with children the biggest recipients (72%). Indeed the average amount gifted in 2020 was £8087 compared to £5421 pre pandemic (2019) – a 49% increase and a clear indicator of the want for investors to safeguard futures for loved ones.

 

How invested is the UK investor in Responsible Investing?

Investors feel that ethical/socially responsible financial products are more important now than at the same time last year – up 9 percentage points (23% – 32%) with three in ten of those surveyed stating that they believe that these products will be more important in the future – up six percentage points (24% – 30%).

However despite investors acknowledging the importance of ESG/RI there is a continuing perception, despite contrary evidence, that it carries a performance penalty with investors ‘prioritising financial security over wider ethical considerations’ – up five percentage points (23% – 28%).

 

Younger investors look to DIY platforms

Since the start of the pandemic in March 2020, four in ten investors under 35 (39%) have invested more with DIY platforms – compared to just 14% of 55+. And while the younger investor has indicated a ‘happy to do it myself’ attitude regarding financial planning and investments they are less confident when it comes to their feelings about the industry. Just under one-third of under 35s (29%) are confident markets will bounce back compared to more than half (52%) of investors aged 55+.

Perhaps predictably, younger investors are more tapped into trends and news stories connected to investing.

39% of under 35s cited an awareness of the growth in DIY platforms with 44% familiar with the story around Reddit users driving up the share price of Game Stop and 31% aware of the rise in silver prices. Investors aged 55+ recorded significantly lower awareness across all trends.