The Consumer Price Index (CPI) rate of inflation has fallen to 3.6% with the largest downward pressure coming from fuel.

It seems that inflation is set to continue to fall!

The summer months were then characterised by global market mayhem, as escalating US political tensions saw a lack of agreement on the debt ceiling and threats of debt downgrades from rating agencies, while in Europe a series of bailouts – direct and indirect – attempted to calm the chaos. China witnessed further rate hikes, while Japan and Switzerland enacted currency interventions, and it became clear that global growth was slowing.

The European soap opera held the market’s attention throughout autumn, and after much stalling and fanfare, a broad framework devised by euro zone leaders – including a debt haircut of 50% for private investors, recapitalisation of banks, and a three-year €489 billion ECB bank liquidity programme – had a more positive market impact than many predicted. There were new leaders for the ECB, Italy, Greece and Spain, and an alarming rise in most euro zone government bond yields. Elsewhere in Europe, the Bank of England introduced a new, four-month £75 billion cycle of quantitative easing. In the emerging markets there was a general loosening of monetary policy, while the US witnessed the rebirth of Operation Twist (last seen in 1961) with a $400bn plan to buy bonds, but started to see more reasonable macroeconomic activity and data, regarding housing in particular.

As the year drew to a close, a divergent world appears to be emerging, with signs of improvement in the US, Europe in recession, and the emerging world facing a softer landing than some had feared.

2012 will of course hold extreme austerity across Europe, and problems are also arising in emerging economies, with Chinese inflation back to 2008 levels and the Indian economy slowing fast. However, there is some optimism to be found on the horizon. The EU (minus the UK) is showing some unity at last, and the ESM (a new primary bailout mechanism with €500bn firepower) is set to be available by July 2012. The US is witnessing signs of decent components for recovery, particularly in auto, housing and manufacturing. Demand is resilient consumers are spending, and initial jobless claims are at their lowest since May 2008, signalling employment growth. GDP expectations for 2012 are also improving slightly, pointing to a brighter new year.

So not all doom and gloom but given the over-arching uncertainty surrounding the global economy, it is likely that the volatility seen in 2011 will continue to blur the story in 2012.

An undercover investigation undertaken recently by consumer watchdog Which? had discovered a number of bank and building society advisers had given substandard advice. Only five out of 37 advisers gave good advice about investments after visiting branches of seven leading banks and three building societies.

Which? claimed that the majority of advisers demonstrated a “poor understanding of the risks of investing, and made misleading statements about the features and costs of available products”

The research also revealed that 18 of the advisers claimed their advice was free. However, banks and building societies make money through commission paid for the products they recommend – but only a handful of advisers admitted this.

Interestingly, at the end of 2012, financial advisers will be banned from receiving commissions from firms for recommending their investment products, under rules designed to stamp out mis-selling to consumers.

The investigation showed that “the high street isn’t the best place to go for investment advice” and states that “if in doubt, consumers should always talk to an independent financial adviser.”*

With this in mind Profile Financial Management has recently expanded its team and has grown into larger premises. The firm now occupies the charming “Honeysuckle Cottage” that was the original visitor centre for the Lilliput Lane ceramic firm at Skirsgill Business Park near Penrith.

Richard Utting Director of Profile explains: “The Financial Service Ombudsman 9/10 review* shows that 98% of all complaints have been against large financial institutions such as; banks & building societies (63%), insurance companies (27%), investment houses, mortgage brokers & stockbrokers’ (7%). Only 2% of complaints during were against Independent Financial Advisers.”

These numbers clearly show that customers want a more personal and individual approach to managing their finances. As a result, Profile Financial Management has seen a significant surge in interest in their services and have expanded their operation in the past 12 months.

Profile has refurbished the interior of Honeysuckle Cottage to create a relaxed and informal atmosphere for clients. In addition, Profile has also created a presentation and seminar room to provide local customers with events and seminars of general interest as well as offering this as a function room for local businesses.

Richard explains: “We wanted to create a place where our customers feel comfortable and relaxed. The surroundings of Honeysuckle Cottage provide an informal and unusual environment that you wouldn’t expect to find in a financial services company. Everyone really enjoys visiting our offices.”

Profile Financial Management was one of the first financial services company in Cumbria to stop taking commissions on products and introduce a fee-based approach to financial services. At the heart of the company’s impartial and independent service is a highly respected financial planning method using cash-flow modelling. This approach allows the company to create an integrated financial plan, from which informed decisions can be made. Once created the plan is reviewed and updated annually to ensure it continues to meet the aims and objectives of the client. In this way Profile can provide financial planning to people who require long term proactive advice about their finances.

With growing uncertainty in economic markets recently, the trend for growing complaints within the financial services industry is not going to go away. The ethos of Profile is about doing things differently, taking a personal approach and ensuring customers feel secure in their financial choices. They work to simplify people’s financial life; managing risk, consolidating debt and giving them a secure future. Profile Financial Management offers some relief to consumers during this turbulent time; providing a relaxed environment, trustworthy independent advice and somewhere to turn for people with any financial worries.

Even though it has been forecast by the independent Office for Budget Responsibility that the UK would not enter recession next year, as had been predicted by the OECD, our economic destiny remains firmly in the hands of Europe.

However there was some good news with motorists seeing the 3p fuel duty increase planned for January scrapped and commuters will see regulated rail fares increase by 1% over inflation, rather than the planned 3%.

There is some long-term pain with the state pension age due to increase to 67 by 2026, eight years earlier than previously planned. In the short-term, the value of the state pension will increase by £5.30 a week in April 2012.

The key theme of the Autumn Statement was investment in infrastructure and enterprise. It seems that two groups of UK pension funds will help to fund investment in infrastructure projects over the course of the next decade. Generous income tax relief will be available to investors in Enterprise Investment Schemes, aimed at providing funding to start-ups.

However as you will appreciate with every Budget and Autumn Statement, the devil is often in the detail. As more details come to light, we will add blogs on specific planning topics to our website at www.profilefm.co.uk

Do call us on 01768 840000, email info@profilefm.co.uk, or follow us on Twitter @profile_fm.

We look forward to hearing from you.

To hear what Justin had to say about the state of the world economy click here

The intention was for him to come in the spring but unfortunately, due to an operation on his leg in March of this year (which incidentally has made him 2 inches taller), he was unable to attend. However after some discussion he was able to make it last week (22nd November).

And what a day we had…

Following a presentation to local accountants and solicitors at Honeysuckle Cottage at lunchtime in which he highlighted areas of the Trustee Act and answered general questions from the floor, Justin went on to do two radio interviews, one with ourselves on our new local radio station Eden FM and one with Radio Cumbria.

In the evening he went on to do a presentation to members of the Penrith Chamber of Trade and Commerce which was sponsored by Profile Financial Management.

Justin touched on many areas of the world economy particularly the UK. What he did portray, as he had all day, was a very much more positive picture of the economy than one would hear on the BBC.

Justin is a truly inspirational speaker who has endeared himself to the public and media alike, as he did in Penrith last week. His no-nonsense and prolific views on the complex world of personal finance are a breath of fresh air and we hope that he will visit Penrith again in the not too distant future.

See pictures from the event here

Experts are worried that this new information could cause the government to scrap their already accelerated plan to raise the state pension age to 68 by 2046. The concerns are heightened as David Cameron and other prominent policymakers have recently made statements about austerity leading the way to prosperity.

Experts warn that as state benefits come under pressure, it is important for the public to be prepared for the worst by saving privately.

Some of you may have heard of Justin before; he regularly writes for national magazines and newspapers, and is a frequent commentator on television and radio, both in the UK and abroad. He is an extremely entertaining and enthusiastic speaker and has a wonderful grip of the financial world in which we live.

With twenty years experience following the ups and downs of the markets, the evening event will see Justin provide his assessments, predictions and witty observations on the world economy.

Whether you are a client of Profile or a professional interested in attending the lunch time event, we would be pleased to hear from you.  However numbers are limited so an early reply would be advisable. RSVP to info@profilefm.co.uk

The findings, from the ‘Scottish Widows Women and Pensions Report 201’1, show that women are putting aside on average 12.9% of their income, including employer contributions, compared to the 12.6% men contribute, according to The Telegraph.

But men’s higher average salary of £28,091 compared to £22,490 for women helped them save more for retirement. The report also warned than more women than men – 23% versus 17% – were not saving for retirement at all.

For more information on saving for retirement contact us here at Honeysuckle.

For more information on this refer to our previous blog or contact us at Honeysuckle Cottage on 01768 840000