Hallifax advised me their own product is crap!

large_satsuma

I went to my local Hallifax to open one of their 10% regular saver accounts and was told that it was rubbish and not to bother! Apparently, an investment ISA is a much better bet.

When I pointed out to the nice lady that I already have one of those, quietly making a loss, she said "Yes, but that's because you paid a lump sum in". The way she explained it, by using my investment ISA like a regular savings account - paying in small amounts on a regular basis - I could spread the stockmarket-related risk to the point of virtually guaranteeing 10-20% profit. So I'd have to be pretty silly to make do with a crappy old regular saver. Needless to say, I took her advice and scarpered! At least I got a free coffee out of the appointment...

So my questions: is all of this true? If so, should I pay in monthly for optimum profit? Would weekly be better? Or am I just hopelessly confused? Finally, my investment ISA is with Abbey - is this a good one to stick with?

Thanks for any advice!

poppyolivia

I closed an Isa for that 10% malarky today! Should work out ok for me though cause she sat for awhile going through the best for us. It probably boils down to how much you can afford and when?????

My Isa was 5%.

but to be honest I came outta there with my head buzzing!lol

LongTermLurker

I'm sure Dunstonh has a comment for this :rolleyes:

large_satsuma wrote: »

I went to my local Hallifax to open one of their 10% regular saver accounts and was told that it was rubbish and not to bother! Apparently, an investment ISA is a much better bet.

That's like comparing apples with oranges (or satsumas - sorry) - one is for short term, liquid, cash savings with no possible loss of capital and the other is for a long-term "gamble" on one or more companies making a profit and raising in value, where you may be forced into losing money if you needed access to your cash quickly at the wrong time. An investment cannot be specified in place of savings.

large_satsuma wrote: »

When I pointed out to the nice lady that I already have one of those, quietly making a loss, she said "Yes, but that's because you paid a lump sum in".

Have you paid anything into that since 6 April this year? If so, she shouldn't be offering you an ISA - furthermore, she should have asked that question in the first sentence.

large_satsuma wrote: »

The way she explained it, by using my investment ISA like a regular savings account - paying in small amounts on a regular basis - I could spread the stockmarket-related risk to the point of virtually guaranteeing 10-20% profit.

There's never any guarantee with investments. Oh I wish I was getting 10-20% on mine - where am I going wrong??

large_satsuma wrote: »

So I'd have to be pretty silly to make do with a crappy old regular saver. Needless to say, I took her advice and scarpered! At least I got a free coffee out of the appointment...

So my questions: is all of this true? If so, should I pay in monthly for optimum profit? Would weekly be better? Or am I just hopelessly confused? Finally, my investment ISA is with Abbey - is this a good one to stick with?

Thanks for any advice!

No, it's not true - it's bad selling at its worst. Paying in monthly is better than paying in a lump sum, because it gives rise to Pound Cost Averaging, meaning that this month you pay, sa, £1.50 per share, next month you might pay £1.45, and the month after that maybe £1.53 - when they are cheaper, you get more shares for your money and it takes away the risk that you buy everything at the top price.

Investments are said to be for the long term, over 5 years. In the current market, I doubt anyone would call 5 years long term - it could take 2-3 years before there is any real upward movement at all - no-one knows. Before talking about investments, you need to decide how much cash you have available, how long you could do without this extra money and what your attitude to risk is.

Paul_Herring

large_satsuma wrote: »

I went to my local Hallifax to open one of their 10% regular saver accounts and was told that it was rubbish and not to bother! Apparently, an investment ISA is a much better bet.

For what?

The 10% account is for savers. Who want (or may want) their money at no notice. Or at MOST a year.

An investment ISA is (generally)for people who can hold their money for 5 years or more.

Either your 'advisor' (or you if I'm uncharitably accusing you of trying to advertise equity products with Halifax) are seriously confused between savings and investments.

LongTermLurker

Paul_Herring wrote: »

Either your 'advisor' (or you if I'm uncharitably accusing you of trying to advertise equity products with Halifax) are seriously confused between savings and investments.

It does read something like an advert, actually, doesn't it? Or a troll? But assuming it's real, it is scarily blatant "wrong" advice.

large_satsuma

I don't want to malign the Halifax unfairly. I wasn't pressured into anything. The lady's opening gambit was "Do you realise you won't make 10% on the whole sum invested?" - a legitimate warning. Then she totted up the actual amount and said "That return on six grand? That's rubbish". Then she started talking about my tax-free allowance. It all sounded quite sensible. But now I'm confused, because Martin's site actively promotes regular savers like Halifax's, and certainly doesn't give the impression that you'd be an idiot to prefer one to an investment ISA.

I realise it all depends on your attitude to risk. So my question is really: what's the least risky type of investment ISA?

large_satsuma

Perhaps I should also clarify that I'm not promoting Halifax equity products. For all I know they may be terrible! I think I need to talk to my IFA - and that's what I'd advise anyone equally clueless.

But I'd still like a discussion about it here, if anyone's interested. Sorry the title of my post is a bit troll-like!

bloaty

My OH and I have opened one of these paying the maximum monthly allowance in as we have used up our cash ISA allowances (never had much luck with the stocks & shares ISAs) so we are using this to put surplus money into whilst saving for next years ISA funding. So for us seems a reasonable deal given the interest rate.

So at the end of the day, must depend on each individuals personal circumstances as to whether this is a good deal or a bad deal.

Scousebird_2

That's awful selling-you are supposed to be given a full range of options and your attitude to risk needs to be assessed before an adviser jumps in and starts making recommendations, and only regulated advisers in most banks can do that who have taken special assessments to become accreditted! (Spelling, sorry)??

For someone to stand there and say that you are guaranteed a return is awful, and to tell you it's 10-20% is just shocking. I would go back and challenge the adviser or make a complaint for the sake of other customers who may be vulnerable and be taken in by this persons acute mis-selling. You should be given the range of products available and then be left to make an informed choice from the options, without influence from the adviser who obviously is more interested in their own sales targets and lining their pocket than making sure your money stays in yours. Hope you sort something soon which is what YOU want to do and not what the adviser wants you to do.

callow

When I went to open my 10% regular saver I was basically told the same thing. She was quite reticent about it, encouraging me to use an ISA instead. I have all my accounts and ISAs with Halifax.

I wonder if we had the same woman.


I still opened one anyway.

large_satsuma

I'm trying to remember whether the Halifax rep asked me about my personal circumstances. She didn't go into it in any detail. And she certainly left me with the impression (whether deliberately or not) that an investment ISA could be only a very marginal risk if paid into gradually. I left before she could start getting into specific products.

So if I decide I have zero tolerance for risk, then would I advised to put my full tax-free allowance into a cash ISA before contemplating a regular saver?