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MSE News: Blow for 60,000 F&C child trust fund holders
Former_MSE_Helen
Posts: 2,382 Forumite
"Parents are up in arms after a child trust fund manager announced it's going to introduce an annual fee..."
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Blow for 60,000 F&C child trust fund holders
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Blow for 60,000 F&C child trust fund holders
Click reply below to discuss. If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our New to Forum? Intro Guide.
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Comments
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MSE - please note it isn't just CTF holders, it is also their Childrens Investment plans and Private Investor plans.
In some cases the charges are increasing from 0.2% to 15% for lump sum investments in addition to the annual charge.Remember the saying: if it looks too good to be true it almost certainly is.0 -
I have done quite well out of their investments - got a statement and it was worth £340something and my child is nearly 3 - hence a £90+ return over 3 years. Beats any deposit account.
However, it seems as though this is going to undo the good work so will be looking to move and would be interested in hearing/reading about anyone else who is looking into alternatives to move it into..0 -
Such is a consequence of moving to explicit charging under RDR/platform review.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
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MSE - please note it isn't just CTF holders, it is also their Private Investor plans.
In some cases the charges are increasing from 0.2% to 15% for lump sum investments in addition to the annual charge.
Demand for the product has probably been superceded by ISA's for regular saving.
This is a way of encouraging people to switch.0 -
Such is a consequence of moving to explicit charging under RDR/platform review.
I know it's a crystal ball kind of question but would you expect all investment trust scheme providers to move in this direction as a result of RDR?Remember the saying: if it looks too good to be true it almost certainly is.0 -
Don't forget the option that F&C are keeping quiet about (and MSE missed in the article) to switch for free to the Stakeholder version of F&C's CTF which does not carry the annual fee. The only downside is your sole investment choice is a FTSE All Share Tracker.0
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I know it's a crystal ball kind of question but would you expect all investment trust scheme providers to move in this direction as a result of RDR?
I would as that is the whole point of RDR. Now all types of investment must be charged in exactly the same way whereas before some were being subsidised from the commission paid by providers on managed unit trusts.0 -
Don't forget the option that F&C are keeping quiet about (and MSE missed in the article) to switch for free to the Stakeholder version of F&C's CTF which does not carry the annual fee. The only downside is your sole investment choice is a FTSE All Share Tracker.
Except that it isn't just CTF that this affects as per post #2. We can move elsewhere but if all providers do the same thing then we will have to think again about options. Saving £25 per month is not effective when the charge is £30 per year.Remember the saying: if it looks too good to be true it almost certainly is.0 -
I know it's a crystal ball kind of question but would you expect all investment trust scheme providers to move in this direction as a result of RDR?
For new business yes. For existing business I suspect you will see some force a move and others leave legacy business as it is.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
This is a classic course work for the compulsory financial education course they want to teach young children.
Q1. Compare the performance of a child trust fund to a piggy bank over a a ten year term. The charge is 10% of fund value each year.
Q2. Assuming inflation is 2% per year, what is the value of each option in today's money?
Q3. Should you shoot the adviser who tells you to invest in either? Discuss.0
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