Understandably, since the outbreak of the Coronavirus we have received many calls from clients who are anxious about the effect on their pensions and investments.
Below we’ve compiled a list of the most common questions we’ve received and our answers. We hope you find this useful – but please do contact your Brunsdon Financial Adviser for further help, support and advice.
Q: Should I cash in my investments?
A: By taking your capital out in such times as these, you do in fact consolidate any investment losses. As such, trying to retain an element of calm and taking a longer-term view would be beneficial, albeit short-term worries may be unavoidable.
Q:Should I change my investment strategy?
A:This depends on your individual circumstances and it will always be best to discuss this with your Financial Adviser. Your Adviser will be able to determine your needs and make appropriate recommendations based on what may be best for your current requirements, whilst still trying to achieve your future objectives.
This will include factors such as the remaining term in which you intend to have your capital invested and whether or not you have time to wait for a recovery in the markets. If you do have time, this would normally be the best strategy rather than surrendering your investments.
Some clients have been fortunate enough to have pre-empted a fall in the markets and as a result decided to lower their risk strategy to limit losses. In this situation, a more active approach may be required between the adviser and the client, which could include making a decision as to when to consider an increase to their investment risk mandate in order to make the most of any market recovery.
Q:How long will this last?
A:This is the million-dollar question and we wish we knew the answer! However, as the bad news flow slows, the good news from countries which are further through the pandemic will sound more loudly. If the infection rates are seen to be being brought under control, this would be very good news and aid market sentiment.
Although social distancing measures and lockdowns are showing some success in different countries and there is hope that a vaccine will be developed, it is impossible to pinpoint exactly how long this pandemic will last. However, Fund Managers remain optimistic that within the next six to twelve months we will be looking past Covid-19, as recent developments mean a “U” shaped recovery (more time spent in the turn, but then a sharp recovery) is now a central case.
Is it a good time to put new money into the markets, or should I leave this in cash until the markets are ‘more stable’?
A:At Brunsdon Financial, we stress the importance of investing for the long term. We believe it has been widely accepted that it’s about the ‘time in the market’ rather than ‘timing the market’. Therefore, if investors are looking to buy at the bottom and work their way up, or sell their portfolio to cash to buy back in at the bottom, it is important to remember that investing is for the long term. This may be a time to re-evaluate your attitude to risk to ensure you are in the correct portfolio for the amount of risk you are willing and able to take on.
Q: Can I stop or reduce my pension contributions?
A:Yes, you can. You can stop contributions to your personal and / or workplace pensions. You can also decide to reduce your contributions to your personal pension and may be able to reduce your contributions to your workplace pension. However, the latter could mean your employer’s contributions will reduce or stop, dependent on the scheme.
We would recommend that neither decision is taken before contacting your Brunsdon Financial Adviser. Do also remember that by stopping your contributions, you’ll be losing out on the tax relief you gain from paying into a pension.
Q.Will I still receive my annuity payments?
Yes, your annuity will continue to be paid as normal, as laid out in your policy’s terms and conditions.
Q.How is Brunsdon Financial operating during the crisis and how resilient are you as a business?
Brunsdon Financial is a long-established business with foundations stretching back to the 1930s. We are financially strong and equipped as a business to react to and mitigate any risks, including those we are facing during the Coronavirus crisis.
We have implemented contingency plans to adapt to the current situation, including closing our offices and working remotely. Although we are no longer meeting with clients face-to-face, we are keeping in touch by telephone and / or video calls. Although it’s not quite ‘Business as usual’, our Financial Advisers are very much here to help and support you through the current challenges and beyond.
The information provided does not constitute advice or recommendation and does not form part of any contract for the sale or purchase of any investment. Potential investors should read the Key Investor Information Documents before investing. The Prospectus of the IFSL Brunsdon OEIC is available on request. The IFSL Brunsdon OEIC may not be suitable for very low or very high risk investors. Investments can fall as well as rise, irrespective of the level of risk chosen, and the value of an investment and any income generated from it cannot be guaranteed and can fall as well as rise as a result of market volatility. You may not get back the amount you originally invested. Brunsdon Financial is the trading name of Brunsdon Financial Services Ltd. (Reg. No. 03434005), Brunsdon Asset Management Ltd. (Reg. No. 07098607) and Brunsdon Employee Benefits Ltd. (Reg. No. 11021460). Brunsdon Employee Benefits Ltd is an appointed representative of Brunsdon Financial Services Ltd, which is authorised and regulated by the Financial Conduct Authority (FCA). Investment Fund Services Limited (IFSL) acts as Authorised Corporate Director (ACD) and provides fund hosting services to the Brunsdon Investment Funds. IFSL is authorised and regulated by the FCA.