MetLife being recommended by IFA

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  • bostonerimus
    bostonerimus Posts: 5,617
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    edited 10 June 2017 at 2:46AM
    dunstonh wrote: »
    It isnt that in the UK. A few US providers have tried over the years to enter the UK market with that type of product but fell flat on their face and most returned to the US closing their UK arms.

    So what is it?

    I have a US TIAA-Traditional deferred annuity that pays 3% minimum and is currently paying 4.85%...these numbers are all after fees. In fact they don't even publish the fees. Something like that would be good for the OP.

    After all the fees are taken out what is the minimum and projected annual accrual rate and what capital amount might you pass onto heirs. Take a look at the contract. If there is anything in it that you don't understand then don't sign it. There will be lots of clauses and legalize and I challenge you....or the IFA....to fully understand it.

    Has it been compared to a bond or saving ladder? Those would give a better net minimum return.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • Linton
    Linton Posts: 17,045
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    .....

    Has it been compared to a bond or saving ladder? Those would give a better net minimum return.

    Can you suggest some savings products that will provide better than 3% return on £200K?
  • dunstonh
    dunstonh Posts: 115,904
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    So what is it?

    Unit Linked funds with capital security able to be added (at cost).
    In fact they don't even publish the fees.

    UK is unbundled on pricing. So, fees are disclosed. It also tends to make the product charges lower than the US as they are not factoring in sales/advice charges.
    There will be lots of clauses and legalize and I challenge you....or the IFA....to fully understand it.

    It's a bit rich you saying that when you don't know the product yourself.
    Has it been compared to a bond or saving ladder? Those would give a better net minimum return.

    You say bond but what you do mean by bond?
    Corporate bond
    Strategic bond
    Onshore investment bond
    offshore investment bond
    NS&I investment bond
    premium bond
    and many more.

    Savings ladder is not a phrase used in the UK.
    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.
  • bostonerimus
    bostonerimus Posts: 5,617
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    edited 10 June 2017 at 1:53PM
    dunstonh wrote: »
    Unit Linked funds with capital security able to be added (at cost).

    With this sort of Guaranteed Investment Contact you have to pay for the insurance. Everything hinges on the price you pay and the advisor fees. It would be interesting to compare the MetLife product after all fees and expenses with a high quality corporate bond ladder held to maturity.

    But as the OP doesn't need this money for income and is interested in passing money on then I think they are over emphasizing principal preservation and would be better in a low cost equity and bond fund portfolio where there would be some volatility with a significant chance of growth.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • dunstonh
    dunstonh Posts: 115,904
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    Everything hinges on the price you pay and the advisor fees.

    No it doesnt.
    It would be interesting to compare the MetLife product after all fees and expenses with a high quality corporate bond ladder held to maturity.
    The fact they are not comparable would be an issue.
    But as the OP doesn't need this money for income and is interested in passing money on then I think they are over emphasizing principal preservation and would be better in a low cost equity and bond fund portfolio where there would be some volatility with a significant chance of growth.

    But the OP has made it clear what their objective is. If they cannot be persuaded otherwise, then it doesnt matter really what any of us think. The OP is the one that has to sleep at night knowing the investments are the way they want them to be. Even if others feel greater risk is more sensible.
    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.
  • RADDERS
    RADDERS Posts: 241
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    dunstonh wrote: »
    No it doesnt.


    The fact they are not comparable would be an issue.



    But the OP has made it clear what their objective is. If they cannot be persuaded otherwise, then it doesnt matter really what any of us think. The OP is the one that has to sleep at night knowing the investments are the way they want them to be. Even if others feel greater risk is more sensible.

    Again thank you dunstonh I know I could possibly do better but as you say it is me that has to sleep at night and I don't have to worry about the capital fluctuating.
    I realise that we are very lucky but we have worked and saved hard to be in the financial position that we are in for a long and happy retirement.
  • bostonerimus
    bostonerimus Posts: 5,617
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    edited 10 June 2017 at 2:30PM
    RADDERS wrote: »
    Again thank you dunstonh I know I could possibly do better but as you say it is me that has to sleep at night and I don't have to worry about the capital fluctuating.
    I realise that we are very lucky but we have worked and saved hard to be in the financial position that we are in for a long and happy retirement.

    You don't have to put everything into a single product. Why not put half in some laddered savings accounts where you'll get 2% interest. That will guarantee your principal and get you some growth. The rest could go into a conservative lifestrategy fund that will fluctuate, but you can reinvest all the income so even with a bond fund heavy portfolio you'll work through interest rate increases.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • bostonerimus
    bostonerimus Posts: 5,617
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    dunstonh wrote: »
    No it doesnt.
    The IFA fees will come off the top
    The fact they are not comparable would be an issue.
    Just take the account values net of all fess at the end of each year. You can compare apples to oranges. Over say 10 or 20 years how would the MetLife portfolio with the cost of the insurance and other fees stack up against a savings account ladder with out fees?

    But the OP has made it clear what their objective is. If they cannot be persuaded otherwise, then it doesnt matter really what any of us think. The OP is the one that has to sleep at night knowing the investments are the way they want them to be. Even if others feel greater risk is more sensible.

    Yes, I have the luxury of not being an IFA.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • Linton
    Linton Posts: 17,045
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    edited 10 June 2017 at 3:02PM
    You don't have to put everything into a single product. Why not put half in some laddered savings accounts where you'll get 2% interest. That will guarantee your principal and get you some growth. The rest could go into a conservative lifestrategy fund that will fluctuate, but you can reinvest all the income so even with a bond fund heavy portfolio you'll work through interest rate increases.

    High Interest SIPP deposit accounts are rare, and only seem to be provided by non mainstream banks. Whether they are accessible from the normal online brokerage SIPPs I dont know, but I would doubt it. A quick check suggests for example that H-L used to but dont now.
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