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How to set up a faster Payments system in your business

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(Sponsored Content)

In this fast-paced business environment, the ability to offer faster payments is what makes the difference between being an extremely efficient organisation focused on customer satisfaction and one that is potentially headed towards  disaster.

Faster payments significantly reduce the waiting time for transactions to take place, which means peace for both parties. Nowadays, with the world advancing rapidly every business is doing what it can to surpass others in its race towards dominance. Setting up a faster payments system for your own business will significantly boast the operations and the reputation of your firm.

With the right tools you can observe benefits you did not know your company could enjoy. Here is a brief guide to setting up a faster payment system in your UK-based business.

Learn how faster payments work                                                             

Faster payments offer customers the opportunity to make quicker electronic payments or even transfer revenues online or via phone. Instead of taking days for a transaction to complete, the task of a faster payment only takes a couple of hours. What’s more, those who have this feature in their business are free to conduct electronic transfers at any moment 24/7. The service is even available on official holidays including the days when banks are off.

Faster payments are made electronically within the duration of two hours, given that both the sender and receiver are part of the Faster Payments service. They are mainly used to make a significantly large number of small value payments that include expenses, bills, online transfers and supplier payments.

Whilst most Faster Payments are usually restricted to 250,000 pounds; many individual banks impose a lower limit to transactions. Since the Faster Payments was launched in 2008, more than five billion payments have been processed using this very scheme.

Analyse the benefits for your business

As the name implies, faster payments are payments that take less time to be processed and are delivered at a more rapid pace in comparison to a regular payment. Continue Reading…

What to expect when applying for CPP

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What should you expect when applying for CPP (Canada Pension Plan) benefits? As my latest Retired Money column for MoneySense explains, age 64 is not just the age the Beatles ask the question “Will you still need me, will you still feed me?”

It’s also the age when Service Canada can be expected to reach out to you with a letter to your home address, giving you details of how the Government of Canada will feed you with CPP benefits once you turn 65 (or as early as 60 should you choose reduced early benefits).

But fear not, Ottawa will also  still need you, in the form of taxable revenue: like Old Age Security, CPP benefits are fully taxable.

The full piece can be accessed by clicking on the highlighted headline: CPP application: Here’s what to expect during the process.

The piece’s focus is on the actual application process but does touch on the age-old topic of the optimal age to start receiving benefits: which can be anywhere between age 60 and 70. The Hub has tackled this several times in its almost three years of existence. Use the search engine to the right and enter CPP, or click here.

Try the Canadian Retirement Income Calculator

The piece also links to a useful web tool provided by Service Canada: the Canadian Retirement Income Calculator, which you can access by clicking on the highlighted text.

Continue Reading…

Underinvested in China? How to invest in the “New China” Economy

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Highrises in Shanghai’s new Pudong financial district.

By Caroline Grimont

(Sponsor Content)

Investors are missing out on strong growth opportunities by being underinvested in China:  the world’s most populous country and second largest economy.

Since China slowed down from two decades of near double-digit growth, investors have become skeptical about investing in the country.

They worry about the country’s macro challenges; among them, a high leverage ratio resulting from a rapid buildup in debt over the past 10 years, excess capacity in industrial segments, an over-reliance on investment as a growth driver, and more recently, the risks of protectionism.[i]

In our view, these challenges are overstated. China has the capacity to overcome them and has taken a measured approach to sustain its growth, albeit at a slower pace.   The Chinese economy has grown almost ten-fold from US$ 1.2 trillion in 2000 to US$ 11.2 trillion in 2016, second in size only to the US.  Given the size of China’s economy now, a slower more sustainable rate of growth makes sense.

Our view is shared by Morgan Stanley, which states: “We expect China to avoid a financial shock and achieve high income status by 2027. Our view is that moving to higher value-added activities will propel the economy forward and drive the continued medium term outperformance of MSCI China versus MSCI EM, providing significant investment opportunities.”[ii]

China accounts for almost 50% of global economic growth

China remains one of the fastest growing economies in the world, with a forecasted growth rate of 6.5% in 2017 and 6% in 2018. On a global scale, China represents 15% of the world’s economy and accounts for close to 50% of global economic growth.

Continue Reading…

Alternative Investments for the Masses

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Is it time for the average investor to look into alternative investments to the traditional balanced portfolio of stocks and bonds?

In a column in Thursday’s Globe & Mail Report on Business, I look at a relatively new mutual fund from Mackenzie Investments that gives both average and affluent investors a way to diversify their portfolios into alternative investments or asset classes.

You can find it by clicking on the highlighted headline: Alternative Investing for the Masses.

The Mackenzie Diversified Alternative Fund (“MDAF”) is positioned as a low-risk way to diversify beyond the typical “balanced” fund or balanced portfolio of stocks and bonds. As the article says, both traditional stocks and bonds appear pricey at this juncture, and studies show that putting up to 20% of a total portfolio can smooth returns. Indeed, many giant pension funds have far more than that, including such well known pensions as Ontario Teachers and OMERs.

Non-traditional asset classes seen as “alternatives” include private equity, infrastructure, emerging-market debt, limited partnerships and a host of other investments not easily accessed by the average investor. Pension funds can get their own direct access to alternatives but for individuals many were available only through “offering memorandums” available only to those considered sophisticated investors: with $1 million in investible assets or combined annual family income of $300,000.

Low entry point, liquid

By contrast, the Mackenzie fund can be purchased for as little as $500, like most mutual funds, and unlike many hedge funds, can be liquidated on demand like any other mutual fund.

The article goes into the fee issue: the A series has an Management Expense Ratio (MER) of 2.42% and the F series 1.25% (advisors will then tack on their own fee, typically another 1%). But affluent investors get a price break under the Mackenzie Private Wealth Solutions’ preferred-pricing program, with the basic management fee for household wealth in all Mackenzie funds tapering down from 0.8% to as little as 0.5% for $5 million dollar portfolios.

 

Is the Fixed Income Market buying what the Fed is Selling?

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Fed’s Balance Sheet Normalization Guidelines (in billions)

By Kevin Flanagan , WisdomTree Investments

Special to the Financial Independence Hub

In the post-Federal Reserve (Fed)-meeting world of the money and bond markets, there seems to be a disconnect between what market participants are thinking and the Fed policy decisions actually being made. It is a case of the market not buying what the Fed is selling.

In other words, the term “policy mistake” has begun to enter the discussion, as the U.S. Treasury (UST) arena appears to be operating under the assumption that the Fed should perhaps ease up on its tightening campaign because

(a) inflation has been slowing in recent months, and

(b) economic growth has been lackluster. This line of reasoning concludes that the policy makers will go too far with their rate hike and balance sheet normalization plans, to the detriment of the economic setting.

Based on the Fed’s actions at the June FOMC meeting, the policy makers do not seem to be deterred in their “full steam ahead” outlook, as they envision yet another rate hike this year and expect “to begin implementing a balance sheet normalization program this year” as well. (On Wednesday, July 27, the Fed kept interest rates unchanged — Editor.)

So, let’s assume economic and financial conditions do live up to the Fed’s expectations, what then will their plan look like for phasing out their reinvestment program.

Continue Reading…