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Please help my Dad

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Please can you advise my dad he has some money to invest he keeps going round in circles,at the minute he's looking at Barclays,The Defined Returns Plan he has £20,000 to invest but is very worried and doesnt know who to trust.Is this a good investment ,PLEASE HELP HE KEEPS PESTERING ME ,i dont have a clue
Thanks

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  • jem16
    jem16 Posts: 19,587 Forumite
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    For investments don't trust a bank. These kind of capital guaranteed schemes are usually described on here as rubbish and don't touch with a bargepole.

    Is it an investment your dad actually wants? An investment should be for the long term, i.e. at least 5 years and preferably longer. If so see an IFA.

    If he just wants to save the money find the highest interest account.
  • Presumably the Barclays product has been suggested to him by a Barclays Financial Adviser? So they would advise that, wouldn't they? They only push their own products.

    Looking at the webpage, the Defined Returns Plan looks like a GEB (Guaranteed Equity Bond), much loved of tied financial advisers but not generally receiving much favour on these pages.

    The good bit about GEBs is that your capital is protected (if anything in banking can be said to be safe these days). The bad thing is that you get no return on your money unless the FTSE is at a certain level at a certain date - it can have broken all records in the meantime, but if it fluctuates at the wrong time, you get no return. The rates of return may look attractive but you have to remember, they are rolled up over several years so actual rate of return per year will be a lot less. Unlike investing in equities or funds, you also get no dividends. And on the Barclays product, I notice that the adviser skims 3% or so.

    Just at the moment, with all that's going on, it's hard to know what to have confidence in as there seem to be no winners. I would have thought a fixed-term bond deposit would have been a good bet, but rates on those are now pretty unattractive - but at least they are guaranteed. ICICI are still offering 4.3% if he is prepared to go with them having read MSE health warnings;) .

    HTH
    "Success is the ability to go from failure to failure without losing your enthusiasm" (Sir Winston Churchill)
  • mickwoo
    mickwoo Posts: 18 Forumite
    jem16 wrote: »
    For investments don't trust a bank. These kind of capital guaranteed schemes are usually described on here as rubbish and don't touch with a bargepole.

    Is it an investment your dad actually wants? An investment should be for the long term, i.e. at least 5 years and preferably longer. If so see an IFA.

    If he just wants to save the money find the highest interest account.
    Thanks for your help, he doesnt mind investing for 5 years can you recommend any where
    Thank you
  • jem16
    jem16 Posts: 19,587 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    mickwoo wrote: »
    Thanks for your help, he doesnt mind investing for 5 years can you recommend any where
    Thank you

    If you want to DIY then the best place to invest in funds is through Hargreaves & Lansdown. You have to do the research and choose your own funds but the initial charge and part of the amc will be refunded.

    if you don't know how to choose your own funds I would recommend seeing an IFA who can choose the funds for you taking into account your dad's risk profile.
  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    If he's so worried he'd better remain in cash.The markets are too volatile at present for people with no experience.
    Trying to keep it simple...;)
  • Farway
    Farway Posts: 14,658 Forumite
    Part of the Furniture 10,000 Posts Homepage Hero Name Dropper
    EdInvestor wrote: »
    If he's so worried he'd better remain in cash.The markets are too volatile at present for people with no experience.

    I agree entirely with this sentiment, even the "experts" are having troubles

    Another alternative would be buy one or two shares directly, using an online broker such as Selftrade or iii, he would have to do some research, and the big question is why does he want to invest & not save?

    Is he looking for growth or income [probably a bit of both I guess]

    he could look at "safe" shares, like utilities or grocers, for instance electricity companies, Transco, National Grid, Tesco, BP, Shell etc, only he will know what suits his plans, and he must realise that shares, and funds, can & do go down
    Eight out of ten owners who expressed a preference said their cats preferred other peoples gardens
  • Doomcow
    Doomcow Posts: 1,729 Forumite
    i agree with EdInvestor.

    i'd keep the savings in cash - ok its lower returns, but he wont get all uptight and scared about it.

    max out the 3600 in the cash ISA first - maybe you want to look at fixing it for a few years. - you can always add another 3600 in the next financial year.

    ok, the rates aint great, but its not like he'll loose it all if it goes tits up.
    Mr & Mrs Doomcow Wedding Fund: £10200/£18000 (by 04/2012) (spent £2000)
    meiow meiow purr meep merp purr urble purrup :)

    requires further financing
  • It is anybody's guess as to what might hapen and when it will happen.

    :eek:
    ...............................I have put my clock back....... Kcolc ym
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