Savings & Investments

Independent Savings & Investments Advice

Why are we encouraged to save money? From childhood most of us are told to put away money to save for the future - perhaps for something special? Or perhaps to be sure that when we really need something we have the funds to acquire it, without taking on debt? Whether you place your money in a piggy bank, or in a multinational investment house, our aims are broadly the same; to provide for our future needs, and to protect ourselves against unexpected causes of expenditure.

When planning your finances, it is important to distinguish the difference between savings and investments. Savings are generally funds that you set aside, but can access relatively quickly. These savings are often for a specific need or purchase, like a holiday or a new car. The most common way of ‘saving’ is into a bank account (‘deposit’ account) where the money can be accessed in an emergency, and for every £1 you put in, you will get £1 back (short of a bank collapse!), and possibly some interest.

Investments are designed to be held for a longer term, usually at least 5 years. You need to be comfortable with tying up this money for a period of time, and should not consider investments unless you have some savings in place. Most investments are not guaranteed to return your money in full, although do offer the prospect of higher returns than deposit accounts. Returns, risk and volatility are the factors that will determine a suitable place for your savings.

Savings and Investment products range from a simple current account, which allows a small amount of interest, but facilitates regular payments and withdrawals without detriment to your savings. At the opposite end of the scale would be company shares, where you invest money in a company, with the prospect that the company will prosper and the shares will increase in value over time. Whilst the benefits are potentially high, the risks are also much greater.

Investment & Risk
All investments carry some risk, and the Investing and Risk page includes some information on how we might manage this risk. We can learn more about the particular risks and rewards of different investment funds by looking at their sector and assets in more detail.

All types of shares have different characteristics and these characteristics are complex. Hence there are fund managers within the industry to assess and measure these features and make investment decisions based on their knowledge and market experience.

Investment funds will have a particular aim, and often have a specialist sector which allows them to be compared to other funds of a similar make-up and ensures that the actual assets of the fund (the investments made by the fund manager on behalf of individual investors) remain in proportion with the selected aims and specification of the fund.

Sectors and Assets
The fund sector identifies broadly the areas in which the fund will invest. This can be based on geographical terms, or in a particular industry. For example, there are funds that only invest in UK companies, or Japanese companies, just as there are funds that invest purely in 'technology' companies (IT, telecoms etc). In addtion to this there are sectors that are a mixture of assets. A typical 'balanced managed' fund will have some money invested in shares, some in property and some in fixed interest investments or bonds.

Although there are no guarantees as to performance or returns from any sector, our knowledge and experience can indicate how we might expect investments to perform.

Bentley Brown & Co. Ltd Independent Financial Advisers will be able to explain risk in more detail.

The value of investments can fall as well as rise and you may not get back your original investment.