Unit Trusts and Life Funds From Banks

RWsutt62

Can anyone tell me whether Unit trusts, Life funds, Bonds etc which are run by banks such as RBS, HBOS, Loyds etc. are at risk if the bank goes down?



Thanks,


Rob.

dunstonh

RWsutt62 wrote: »

Can anyone tell me whether Unit trusts, Life funds, Bonds etc which are run by banks such as RBS, HBOS, Loyds etc. are at risk if the bank goes down?

No. You invest in the funds which reinvest into assets. Your fund is ringfenced away from the bank. There is also FSCS protection but its largely in place for fraud rather than failure due to the way unit linked funds work.

Although you should reconsider your investments with banks as they are universally poor quality and expensive. A rough guide to investing is that you should disregard passive managed funds, bank and insurance company funds (apart for low risk where insurance companies have a better record).

RWsutt62

Thanks for the reply.

That is something of a relief. I now need to go and find out what the difference between Passive and active management is. Once I've worked out what I have, then I might have to look at changing some of them. It just feels like a bad time to be swapping them around

A bad time for financial amateurs all around really, maybe I will have to go and find some professional help

Rob.

dunstonh

It just feels like a bad time to be swapping them around

No different to any other time. The problem is the quality. Bank funds are almost completely rubbish across the board. Plus, bank recommended investments dont portfolio plan (not within the remit of most tied reps) so you usually find you end up in a single fund or a random selection with no strategy.

RWsutt62

I see what you mean. Fortunately I have some investments with speciallist unit trust companies too.

Both bank and speciallist investments seem to be doing much better, though not great, than my stand alone shares which are getting a right hammering.

Rob.