Hartford Gold Flexible Investment Bond

metroman · 9 February 2008 at 7:33PM

Hi

Anyone had any experience with Hartford Gold ... I'm thinking of investing a substantial money into their Investment Bonds

Cheers

dunstonh · 10 February 2008 at 12:20PM

Not a fan. The guarantee is useful but the charges are not great (you pay for the guarantee). You can achieve similar styles of guarantee cheaper.

Dont get me wrong, its not bad. Its certainly not in the bottom half. However, it isnt the best option in my view.

metroman · 10 February 2008 at 6:13PM

Hi Dunstonh

Thanks for your quick reply.

Obviously I want to make the best possible choice, but I would never know it, even if it came up and hit me in the face

How on earth do I know when I have found the best place to put my money, and at the end of the day, is it all about charges, or do other factors come into play?

By the way, I had my first meeting with an IFA yesterday, and he recommended the Hartford as being the best option for me.

dunstonh · 10 February 2008 at 10:12PM

How on earth do I know when I have found the best place to put my money, and at the end of the day, is it all about charges, or do other factors come into play?

Charges come into play but they are not a priority. Quality of investment is an issue as well as taxation. The recent announcements on CGT have really kicked investment bonds hard into touch with really only higher rate taxpayers, trusts, over 65s close to age allowance or very large amounts (min £100k realistically) being still suitable for investment bonds.

When you look at the cost of the guarantee compared with a no guarantee option, the cost could be upto 2 or 3% a year. Over 5 years, thats a charges difference of 10-15%. What are the odds of a low risk portfolio being lower by 15% after 5 years? not very much at all (a low risk portfolio may only hold 20-25% stockmarket after all).

So, you do have to weigh up the cost versus the likelihood. How much of a risk is it if you are only going to have 10,20 or 30% stockmarket exposure? Is it worth you paying the extra in charges?

It could be that really do want that guarantee but it is worth looking at the level of risk and reality. I maybe that no one product is the best place. There is a pretty good UK stockmarket product available at the moment and it may be that it should be used for your stockmarket element and unit trusts are used for your non stockmarket element.

By the way, I had my first meeting with an IFA yesterday, and he recommended the Hartford as being the best option for me.

I know nothing about you, your tax position, amounts, aims or requirements. So its impossible to say what is best. I was just remarking about my feelings on the hartford product.

My concerns would be 1) the guarantee is on death and 2) the guarantee only is on withdrawals of 5% a year.

With number 1 you can get death guarantees for free and it maybe that guarantee on death is all you require. With number 2 it could take you 20 years to get your money back - by which time a non guaranteed option would almost certainly have recovered anyway.

metroman · 11 February 2008 at 4:07PM

Hi Dunstonh

Yes, sorry, that was a rather uninformative posting.

Here is my situation, and it would be great to hear back from you....

The money I have to invest immediately is £54,000 sitting in an instant access account and £30,000 in premium bonds.

The money which is not available immediately is £105,000 tied up in 3 x Fixed Rate 1 year and 6 month bonds with banks, which will be ending this July and next January.

All this money came to me in the form of inheritance upon my father's passing last year.

I do not have any form of pension as I have never been able to afford one, and don't think I will be able to contribute enough to make it worthwhile for me when I retire in 12 years time ... The IFA looking at my earnings said that £3600 would be the amount I could put into it per annum.

I am a low tax payer.

I am looking for income and growth, and feel that I would like monthly income to the tune of approx £300.00 per month, but I have no idea whether that is attainable, and could look at less.

Protection of my initial investment I think is very important to me, but at the same time I realise there must be an element of risk to make growth, and I need growth to enable me to retire without being worried if I will be able to support myself on a reasonable level.

Surprisingly I have done two self assessments, and I have come out as "Cautious Managed". With the Hartford Plan, as you know, this could involve the Fund Managers putting my money into 57% Equities .. Do you think I should be looking at that level, or maybe "Income" or even "Rising Income"

Im not going to ramble on any more because this posting is long enough .. and if you wouldn't mind posting the link of the UK Stockmarket Product you mentioned, it would be hugely appreciated, and I hope to hear back from you.

Paulee · 17 March 2008 at 5:55PM

I have just come across this tread whilst searching the forum for information on the Hartford Gold Flexible Investment Bond.

I have read that, in general, Guaranteed Equity/Investment Bonds are not very good products, but I see that Dunstonh says that they can be a good vehicle for Trusts. I am a trustee of a discretionary settlement with around £84k to invest and this Bond has been recommended to me as a save haven that can also provide a monthly sum by cashing in units.

I have no knowledge of Bonds and do not want make an error with this money, particularly as it is not mine. Any comments would be most gratefully received thanks.

Hartford Gold Flexible Investment Bond

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