Podcast Summary
Expand your hiring reach on LinkedIn: Leverage LinkedIn for hiring, access a large pool of potential candidates, and consider flexible short-term health insurance plans and gift options from sponsors.
LinkedIn is an essential platform for small business owners looking to hire professionals. It offers access to a large pool of potential candidates, many of whom may not be actively seeking new jobs but could be open to the right opportunity. With over 70% of LinkedIn users not visiting other leading job sites in a given month, it's a smart move to start your search there. Additionally, there are various other offers and facts discussed in the text, such as beautiful lab-grown diamonds from Blue Nile, flexible short-term health insurance plans from UnitedHealthcare, and amazing gift options from Celebrations Passport. However, the financial news segment focused on the recent withdrawal of savings rates by some banks and the introduction of new rates by smaller providers. It remains to be seen whether this is a deliberate move by the big banks to let smaller providers compete for short-term deposits or if there are other reasons behind it.
Banks reducing shorter-term savings bonds: Banks are reducing shorter-term savings bonds and encouraging longer-term deposits, affecting moderately competitive rates, while competitive rates remain unchanged.
While the Bank of England's base rate may be on an upward trajectory, many shorter-term savings rates are disappearing from the market. This isn't because banks are cutting rates across the board, but rather that they're reducing the number of shorter-term bonds they're offering and increasing the availability of longer-term products. The reason for this is that banks want to encourage savers to keep their money with them for longer periods. However, savers seem to prefer shorter-term options. The cuts to shorter-term bonds aren't affecting the most competitive rates, but rather those that are more moderately competitive. For example, Northern Rock's 1-year fixed rate of 0.35% has been removed, but Birmingham Midshires is offering 4.65% for a 5-year bond. It's not a top rate, but it's not far off. KRBS, the rebranded Kent Building Society, is also offering a reasonable rate. It's not accurate to label all big banks as bad and smaller players as good, as there are exceptions to this trend. The market is more complex than that.
Impact of fees on investment trusts vs unit trusts: Fees significantly impact investment trusts and unit trusts performance, with investment trusts typically having lower fees and outperforming unit trusts on average.
The difference in fees between investment trusts and unit trusts can significantly impact their performance. A recent survey by Lipper for the Financial Times revealed that investment trusts, which generally have lower fees, outperformed unit trusts on average across various time periods. The difference in fees amounts to approximately 50 basis points per year, which can add up significantly over time. This research highlights the importance of considering fees when choosing investment options, as they can have a substantial impact on overall returns.
Investment trusts outperform unit trusts in multiple time periods: Despite lower fees in unit trusts, investment trusts outperformed in 3-year, 5-year, and 10-year periods due to various factors like manager's approach, use of leverage, and fund size.
Investment trusts have outperformed unit trusts in the 3-year, 5-year, and 10-year time periods studied, with approximately 70% of investment trusts outperforming in each period. However, it's essential to consider that fund fees are not the only reason for this difference. Managers may have different investment objectives or manage the money differently, and investment trusts' ability to borrow and retain income can impact performance. Fund managers interviewed prefer managing investment trusts due to fewer concerns about investors selling and creating units. The size of the fund can also play a role, with some suggesting that medium-sized funds offer the best balance between what the manager can do and the fund's popularity. While the sector as a whole is smaller than unit trusts, individual investment trusts can be very large. The industry should take note that fees are a significant factor, but other elements, such as the manager's investment approach, the use of leverage, and the fund's size, should also be considered when making investment decisions.
Fees impact performance in investment industry: Lower fees can lead to better investment performance and substantial savings on mortgage interest payments with offset mortgages
The trend towards reducing fees in the investment industry is a clear signal that fees have a significant impact on performance over the long term. The ban on commissions and the resulting fee cuts in open-ended funds indicate that lower fees can lead to better performance for investors. In the case of offset mortgages, the main advantage is that they allow savers to reduce the amount of their loan and earn interest on their savings at the mortgage rate, which is particularly beneficial for higher rate taxpayers as their savings don't attract income tax liability. This can result in substantial savings on mortgage interest payments, especially as mortgage rates increase. Overall, both the investment industry and financial products like offset mortgages demonstrate the importance of considering fees and their impact on returns.
Offset mortgages let you save on mortgage payments by using savings: Offset mortgages save money by using savings to reduce mortgage balance, with competitive rates and fees from Woolwich, First Direct, Yorkshire Building Society, and Defacto
Offset mortgages offer borrowers the ability to save money on their mortgage payments by offsetting their savings against their mortgage balance. This means that the savings are not locked away, but rather accessible for instant use. There are various lenders offering competitive rates in this sector, including Woolwich, First Direct, Yorkshire Building Society, and Defacto. Rates currently range from a tracker at 3.29% from Woolwich to a 3.99% fixed rate from Yorkshire Building Society. The fees are also competitive, with Yorkshire Building Society charging only £95 and Woolwich charging £999. With up to 30% of all applications for mortgages from Yorkshire Building Society being for an offset, it appears that the popularity of offset mortgages is on the rise. If you're interested in learning more about how an offset mortgage could save you money, be sure to check out Lucy's article in the money section of this weekend's Feet.
