- Opt for regional city centre locations where pockets of demand are highest
- Medium to long-term vision is key
- Focus on areas where rents and property values are rising fastest
HIDDEN COSTS WHEN INVESTING… AND HOW NOT TO GET HIT
By Annie Charalambous, Head of Communications at ETX Capital
According to recent figures, Brits plan to increase their investments by almost a fifth in the wake of the COVID-19 pandemic – with Gen-Z traders most keen to jump on the markets.
But are those looking to boost their profits paying over the odds without realising? A recent study claims UK investors often pay up to six times more in fees than advertised, costing some traders up to tens of thousands of pounds long-term.
ETX Capital is committed to shining a light on common hidden fees that can trip up new traders. Here’s how you can avoid feeling the pinch.
New traders are often unaware that profits made on their stocks and shares are subject to tax, in the same way they pay tax on salary earnings.
If your investment earnings are over £12,300 in a single year, you will have to pay Capital Gains Tax. This will either be 10 or 20 percent, depending on your annual income tax band.
However, married couples can ‘pool’ their tax-free allowance – meaning they can collectively earn up to £24,600 in trading profits each year without contributing Capital Gains Tax.
Some alternative savings vehicles also offer a larger tax-free allowance. For example, you can stash up to £20,000 each year in an ISA and earn interest on your cash.
For those looking to diversify their portfolio, many gold and silver coins are also exempt from Capital Gains Tax as they are technically legal British currency.
As with any commercial service, fund managers and platform providers that help traders set up and manage their investments will charge fees for their service.
However, the size of these costs can catch out unsuspecting investors. According to research, commission costs average 1.03 percent in the UK – around double the equivalent fees in the US.
While these costs are unavoidable for those who need support managing their investment funds, it is possible to reduce them. Research investment platforms and fund managers to ensure you find the most cost-effective commissions for your assets.
Alternatively, you may be able to avoid commission if you have the knowledge of the markets and are comfortable with the risk. If so, there are plenty of accessible platforms that will educate you on how to manage your stocks, forex, commodities and more. Although, keep in mind that you’ll likely have to pay fees to trade on these platforms.
Not that Stamp Duty
All stocks bought in the UK valued at £1,000 and over are subject to Stamp Duty Reserve Tax (SDRT). At 0.5 percent of the asset price, this can soon add up.
This tax is usually absorbed as part of a total fee charged by a fund manager. However, if you manage your own investments, you’ll need to submit details of your assets to the government in good time to skip late payment fines.
While SDRT marks a relatively small fee compared to the rewards on offer for successful investors, many may still wish to diversify their portfolios to avoid mounting tax bills. A common example is adding corporate bonds, which are exempt from SDRT.
Many budding investors starting their trading journey simply aren’t thinking about what happens when you withdraw funds or transfer them to another platform. And for some, this means getting hit with unexpected ‘exit fees’.
These charges are typically written into the terms and conditions of an investment service and while many platforms and brokers have recently agreed to waive exit fees, there are still plenty leaving traders with a shock when the time comes to withdraw cash.
Exit fees are usually charged as a percentage fee of the withdrawn sum, which can represent a significant cost for longer-term investors.
It’s important to check for exit fees, which may also be referred to as ‘redemption fees’, before signing up for a platform or partnering with a fund manager. And those looking to escape these charges should look for providers that simply don’t apply them in the first place – or at least check the expiry date.
INSURANCE TRENDS 2022
- The Insurance market will continue to grow in maturity based on the richness of solutions by InsurTech
In 2022, we’re going to see a true acceleration in the modernisation of the insurance industry. We’ve already started to see this change this year, but it will continue to grow at a rapid pace because of the amount of competition in the market. Competitors are now able to provide direct value propositions to clients that are much more convenient.
It will be key to modernise full technology stacks to get the value from IoT, data and the cloud. As a result, the rise of InsurTech is going to become the norm, with SaaS based solutions based on APIs put in place to deliver personalisation on a grand scale.
- The Insurance industry will become cloud native
Many companies are already using cloud as part of their growing infrastructure and this will be even more apparent in 2022.
Many of the newer technology solutions in the market are cloud native and as a result the insurance sector is starting to understand the true value of the cloud. Whether that’s based on accessing the wealth of third-party solutions available, improved efficiencies or cost savings , this trend will not slowdown and we’ll continue to see insurance companies look at solutions to help accelerate cloud migration.
- In 2022, the insurance industry will start using data managements at scale
Once insurance businesses move their IT infrastructure to the cloud, they will see huge gains from using data platforms.
While there are still many constraints in the sector around data management due to various regulations, the need to have proper solutions to cope with GDPR, cybersecurity and more has never been more vital.
We won’t see an explosion of new technologies, but instead insurance companies deploying current technology at scale and leveraging it to fulfil its true potential.
- The Insurance industry will continue to connect and work together with other industries
There is a huge role for insurance to play in several different industries and this will continue to increase in 2022.
For example, the automotive industry. Many modern cars have various IoT sensors which collect data on how a car travels. The telematics of the data is embedded in the car, which means data can then be sent back to relevant organisations, such as an insurance company, if an accident was to occur. This technology will only continue to get more sophisticated. AI also has a role to play and this will be driven by insurance as well.
There is also a huge opportunity in the healthcare industry and how the ecosystem of services and devices available can help individuals live a healthy life. As more products enter the market, such as Fit Bits and the Apple Watch, having the right solutions to process the data, store data and ensure its compliant will be key. It will continue to be an explosive market for insurance.
- The insurance sector will move towards being part of a wider ecosystem which will be API driven and open
With new platforms being created every day all over the world, we are already starting to see the development of micro insurance products that are built in a way that can be plugged into different marketplaces. This is driving product simplicity as well as ensuring focused customer engagement and services.
To take this to the next level, next year we will see the insurance sector take a larger role in this wider technology ecosystem. The focus for insurers will be on getting value from the technology. This requires a better use of APIs and creating partnerships with open architecture.
In Europe this has already started to happen and will become even more prominent in 2022.
- Throughout 2022, the cryptocurrency world will look completely different
We’re currently going through an evolution of tech ecosystems where insurance organisations are developing them and embedding into them more than ever. Already, we see Insurance players who are building payment mechanism leveraging crypto solutions.
As we move throughout 2022, we expect to see a growth in the alternative ways of making payments. We will start to see smaller players in InsurTech provide instant payments that perhaps are currently inexistant right now.
It will still take time for there to be a global crypto market, but blockchain will continue to provide new opportunities which will impact the insurance industry.
HOW ARE SPEECH RECOGNITION AND AI FIGHTING FRAUD?
Nigel Cannings is the founder of Intelligent Voice Speech recognition and AI provide innovative methods for businesses to significantly...
HOW CAN BUSINESSES BREAK INTO MARKETS BEYOND THE EU?
Atul Bhakta, CEO of One World Express The build-up and aftermath of Brexit impeded the long-term plans of businesses...
BUSINESS DEVELOPMENT + MARKETING + COMMUNICATIONS
Volante Technologies Recognized as Market Leader in Omdia Universe: Selecting a Payment Hub, 2021-22 Report Cloud payments company scores highest...
2022: A FUTURE FOR SIMPLE AND FRICTIONLESS CROSS-BORDER PAYMENTS
Dima Kats, CEO, Clear Junction Even after 18 months of stuttered lockdowns, businesses are still learning how to navigate...
CHRISTMAS IS COMING: WHAT MAKES A GREAT ECOMMERCE STRATEGY FOR THE FESTIVE SEASON?
By Laura Lough, Director of Ecommerce Operations at Digital River There is no doubt the year 2020 presented an...
IS THERE A CASE FOR APPOINTING A DIGITAL TRANSFORMATION OFFICER?
Stefano Maifreni, founder of Eggcelerate You can tell the business world’s direction by the new roles that start to...
WHAT FIREFIGHTERS CAN TEACH FINANCIAL INSTITUTIONS ABOUT DATA COLLABORATION
Gabriele Albarosa, CEO, LiveDataset Digital transformation can be difficult for any business, but in the financial services industry it...
HIDDEN COSTS WHEN INVESTING… AND HOW NOT TO GET HIT
By Annie Charalambous, Head of Communications at ETX Capital According to recent figures, Brits plan to increase their investments by almost...
INSURANCE TRENDS 2022
The Insurance market will continue to grow in maturity based on the richness of solutions by InsurTech In 2022, we’re...
ARTERIA AI SET TO ACQUIRE H4’S FINANCIAL SERVICES BUSINESS ASSETS
H4 Chairman and Co-founder Joe Seifert to join Arteria AI as senior advisor Arteria AI, an award-winning global leader...
PAYNET PARTNERS WITH CLEAR JUNCTION TO FACILITATE CROSS-BORDER PAYMENT SERVICES
Clear Junction announces new partnership with Paynet The partnership helps Paynet provide remittance services to typically underserved communities Clear...
GAME CHANGING: WORLD’S FIRST ON MOBILE DEVICE NEURAL TEXT-TO-SPEECH SYSTEM RELEASED BY CEREPROC
CereProc has today launched the world’s first on mobile device neural Text-to-Speech (TTS) system commercially available for Android and iOS operating...
VIRGIN MONEY ADDS ACCELERATED PAYMENTS TO ITS FINTECH PARTNERSHIPS
An Invoice Finance provider addressing cash flow issues in business Partnership forms part of Virgin Money’s working capital health proposition Virgin Money...
B4B PAYMENTS PARTNERS WITH SENTINELS TO SUPPORT ANTI-MONEY LAUNDERING COMPLIANCE ACROSS EUROPEAN MARKETS
Sentinels’ risk-based model boosts accurate detection rates and provides flexibility to monitor transactions across all B4B Payments’ solutions Sentinels, Europe’s leading...
EPI: HOW TO BUILD TRUST AND ADOPTION AMONG CONSUMERS AND MERCHANTS
By Arnaud Crouzet, VP Security & Consulting at Fime What is EPI? The European Payments Initiative (EPI) is aiming...
BATON SYSTEMS 2022 OUTLOOK
Responses provided by Jerome Kemp, President, Baton Systems Q. Organisations are forecast to spend nearly $6.6 billion on blockchain...
WHY THE EXPLOSION IN LOCAL RETAIL DEMANDS NEW PAYMENT METHODS
Kasper Enggaard Krog, CEO at mobile payment and business technology firm, Vibrant, explains why micro businesses are being badly let...
IS SCARCITY OF TALENT THREATENING THE UK’S FINTECH CROWN?
Opinion From Rafa Plantier, Head of UK and Ireland at Tink From the Square Mile to Canary Wharf, London...
SET YOUR BUSINESS UP FOR SALES SUCCESS IN A POST-PANDEMIC WORLD
Dean Fiveash, Head of FinTech Sales, IFX Without doubt the Coronavirus pandemic impacted every aspect of our lives and fundamentally...
THE EVOLVING TECHNOLOGY NEEDS OF THE FINANCE DEPARTMENT
Jennifer Sims, Senior Consultant at Xledger The world of finance software is evolving quickly, but with many new software...