IFA advice to ditch S&S ISA? Does not feel right! Views

cairon

On an IFA's advice I transferred my old ISA to a stocks and shares Fidelity ISA (fund network). In total including the old ISA I have contributed some £30k over the years including £7 this and it has gone down in value by some £4k from what I contributed. He has suggested I cash it in as all shares and gilts I could buy in terms of these schemes are negative right now and will remain so for some time, cut my losses and put the money into my 4.9% mortgage and pay some of that off. I am more than a little confused as he still really pro my stocks and shares pension but not so my ISA or the £5k (now £4k) his colleague told me to put into Unit trusts last year. Surely if I hold my nerve at sometime in the future these shares will come back. Its not like I need the money it was and always has been a planned long term investment. I am to say the least really rather confused and alarmed by the conflicting advice from one year (and one advisor in a company) to another.

Personally my mind thinks leave it in there. it might go down further but in 5 years or more it will be more than you put in plus the obvious inflation. He seemed to think that the shares market would get far worse going into 2009 so I ask myself why contribute to a share pension at the moment if a share ISA is a waste of time? They share several of the same funds.

I am pretty switched on with money and know usually what I am doing but this one has really thrown me and its a simple case of lots of information but not the right kind.

It was a very depressing discussion and I know shares are rubbish at the moment but should I really just write several grand off as bad luck.:eek:

jem16

It certainly sounds like rather strange advice.

As you say you plan to hold the investment for long term and it is likely that your funds will recover. It's only a paper loss at the moment. If necessary why not switch funds within the ISA?

It also seems a bit strange to cash in the tax-free ISA and yet leave the £5k in unit trusts outside of the ISA.

dunstonh

Seems like a strange recommendation. Especially as fixed interest/gilt funds are available on the Fidelity fund supermarket so if you risk view has changed, it could be done within the existing investment wrapper (which is the whole point of a fund supermarket).

Rebalancing the portfolio is perfectly acceptable and that may involve tweaking the allocations to each sector. Yields on fixed interest funds are much higher than last year generally and interest rates look like they are goingto go down so there has been a trend to increase the fixed interest sector slightly.

Remember that it is your risk profile and your decision. Investing has a lot to do with personal opinions.

JimmyTheWig

Can you ask him for his reasons written down (emailed, preferably!) so you can tell us his logic.
He knows more about you than we do so either (a) he is wrong or (b) something he knows that we don't means he's giving this advice.

Best to check it's not (b) before you go against his advice...

LongTermLurker

JimmyTheWig wrote: »

Can you ask him for his reasons written down (emailed, preferably!) so you can tell us his logic.
He knows more about you than we do so either (a) he is wrong or (b) something he knows that we don't means he's giving this advice.

Best to check it's not (b) before you go against his advice...

Posted, preferably.

Email is not non-repudiating unless it is digitaly signed, and then the signature would need to be backed by a central trusted certificate authority to be worth anything - self-generated signatures are meaningless.

The long and short of the above statement is that I can send an email in my boss's name (or yours if I knew your email address, no password necessary ) without anyone knowing, or I can modify an email before forwarding it on, so emails do not stand up as hard evidence.

A letter or fax is required as evidence, really with a signature.

lpgm

LongTermLurker, I think Jimmy just meant an email would be easier to cut and paste here!

JimmyTheWig

lpgm wrote: »

LongTermLurker, I think Jimmy just meant an email would be easier to cut and paste here!

Exactly.
I wanted the reasons written down so that they weren't open to interpretation. When spoken you remember some things and not others.
I suspect that the written version of the recomendations may be subtlely different from the version given in the original post.

sdooley

The adviser might be thinking it would be good to keep your LTV low on your mortgage so when you get to the end of your deal you can remortgage at a good rate?