one for the IFAs

payless

Interested in anyone's opinion on threadneedle ISA ( multi fund) and Investment account -for excess lump sum and monthly savings ( assume this is a unit linked oiec savings plan)

especially its competitiveness on charges ( are charges higher than other similiar vehicles - looks a bit front loaded to me / if so justified ?), and thoughts of suitability (of latter) for a higher rate tax payer, say over repaying mortgage .
(PM , if prefer not to post)

carnet

payless wrote:

Interested in anyone's opinion on threadneedle ISA ( multi fund) and Investment account -for excess lump sum and monthly savings ( assume this is a unit linked oiec savings plan)

What is their offering ? Is it just Threadneedle's own 30 odd funds ? If so why limit yourself to only these (most, if not all, of which can be bettered elsewhere) when you can choose from literally hundreds available from a fund supermarket ? Or does your reference to "multi-fund" mean funds from other management houses are included - if so how many and which ones ?

especially its competitiveness on charges ( are charges higher than other similiar vehicles - looks a bit front loaded to me / if so justified ?),

What are the charges ? Buying from a supermarket via a discount "broker" cuts the IC to, typically, 0.5% or less and buying through certain ones such as Hargreaves Lansdown, also gets you a kick-back of half their annual commission. Doubt if Threadneedle's offering can beat or even match this.

payless

thanks for reply.... I've PMed you

dunstonh

Payless, would it be under the Sterling ISA and sterling assurance?

The Sterling bond on standard terms tends to come out mid price range to lower price range. However, periodically they run special offers which make them jump up the list.

The Sterling ISA/OEIC is a mini fund supermarket but does have a death guarantee on it (if fund value gone down and you die, they will pay out the amount you invest). Their charges are slightly above those of the other fund supermarkets (not always but usually). However, that death guarantee may be worth it.

Both offerings are mini fund supermarket and not just limited to threadneedle funds.

In over 200 investment cases this year, I have used sterling ISA twice and sterling assurance once. So, at times they can be best but like most things, one week they can be top, next week they can be near bottom.

Having just checked a quick quote for the bond, they are mid table on charges on standard terms. Those above have some special offers on and one in particular is much cheaper and has a wider fund range.

payless

the glossy cover said Sterling, but the illustration said threeadneedle -
their was a print of the outside funds being suggested ( Fid being the main one)

what I thought was strange of big initial commission (25% of first yr plus 4% trail) on the regular saving element of the OEIC ... these obviously were reflected in early cash in values

I assumed these days most OEICS (esp via IFAs) were level charged ( niave?)

dunstonh

Sterling is one of the marketing names used. Sterling have a medium size fund range http://www.sterling-assurance.co.uk/index.htm but are dominated by their in-house Threadneedle range.

I just did a dummy quote for them on IFA basis and it appears that they can indemnify the commission or pay standard rates. This does not affect the charges to the client. On non indemnity basis, they are 4% (of each contribution) plus 0.5% trail. They allow sacrifice. They do not allow trail above 0.5%.

Sterling is part of Zurich and the sterling product range is also sold by Allied Crowbar (or Zurich advice network to give its newer name). The tied agent version of this product would, I expect (based on other tied agent versions), would have an a first year hit. That would match your details. However, there is not first year hit like that on the IFA version. At least there was no option there for me to select it with the various shapes on offer.

Are you sure this is the IFA version and not the tied agent version of the product?

payless

Was issued from a person working for one of the large ifa "salesforces"

have not got copies , but remember on both the lump sum isa and the OEIC , the 1 yr projection was less than amount invested

dunstonh

With a regular of £250 pm, on standard terms, it would be about £100 less over 12 months. (with Sterling)

Large salesforce IFA - I wonder if they have negotiated different terms. Many do. Another reason to avoid salesforces.

whiteflag_3

Hi Payless


The IFAs that I know (and I know many) that recommend the Sterling ISAs do it because of the indemnity commission and no other .

With Fundsnetwork and the like offering a huge fund range (many with discounts) and low cost switches I can see no reason for going with Sterling unless you want one of their Protected Profit Funds, although most money seems to go to Fid Spec Sits.

I went to presentation by a national IFA (p*s*t*ve s*l*tions) where they promoted the indemnity commission on Sterling ISAs as being a great earner!

payless

Hi
thanks

seems to confirm my original thoughts, in this case its sold on max indemnity commission
( perhaps to help cashflow or by employed rep needing target./ no that bothered if falls off later)

Concept good, but fees high, and nothing really not available eslewhere >>

BTW these people ( higher rate tax payers) still had mortgage debt, so return on the non isa element ( after taking into account tax and charges) would need to be v good to be better than repaying mtg

.. and yes Fid Spec Sits. main fund

dunstonh

.. and yes Fid Spec Sits. main fund

Min premium on sterling appears to be £250pm. It sounds like on Fid SS recommended when Sterling would have allowed at least 5 founds (£50 each). Probably sold on past performance. The advisor probably hasn't even heard of asset allocation. Even if they have, they probably dont want to discuss it or deal with it as it can be seen as a complication which would slow the sale down, or even put the sale off.

This thread highlights all that is bad about national salesforces (whether tied or independent).

( perhaps to help cashflow or by employed rep needing target./ no that bothered if falls off later)

Many of the salesforces do not get to keep the renewals/trails for themselves. This makes indemnity very attractive to them. Also, many only get a percentage of the initial commission. So the higher that is, the better. One regional firm in my area only allows the advisors to keep 30% of the initial commission for themselves on shop generated business and 70% for themselves on their own generated business. No incentive there at all to use the "usual" fund supermarkets.