Halifax Personal Investment Plan - Investment Losses - Advice

Sarfaraz

My mum had opened up a personal investment plan with Halifax last September (2008) in a medium risk category. Anyway, with all the credit crunch malarkey we decided to see what the value was today...

Her opening investment was £23,000 and 6 months later today it was valued at £18,000... needless to say whilst we knew the investment was going to be less we didn't think £5,000 would be wiped off the value in 6 months.

The Halifax chaps said that if she hangs in there for the set period of 5 years she shall recoup the £5k and make a bit on top...

My mum has sufficient savings to tide her over for the rainy day but equally she had poured a lot of money into the PIP on the advice of Halifax following a "financial review". Do you think it likely that she will recoup her losses and also is her investment likely to drop further?

...Wish I had advised my mum not to enter into the PIP! Hindsight is a wonderful thing...

gozomark

Sarfaraz wrote: »

Do you think it likely that she will recoup her losses and also is her investment likely to drop further?

yes and yes.....

opinions4u

Sarfaraz wrote: »

My mum had opened up a personal investment plan with Halifax last September (2008) in a medium risk category. Anyway, with all the credit crunch malarkey we decided to see what the value was today...

Her opening investment was £23,000 and 6 months later today it was valued at £18,000... needless to say whilst we knew the investment was going to be less we didn't think £5,000 would be wiped off the value in 6 months.

Sounds about right. For example, the FTSE was trading over 6,000 not so long ago and is now under 4,000.

The Halifax chaps said that if she hangs in there for the set period of 5 years she shall recoup the £5k and make a bit on top...

While you would expect that to be the case, they don't know, do they?

My mum has sufficient savings to tide her over for the rainy day but equally she had poured a lot of money into the PIP on the advice of Halifax following a "financial review". Do you think it likely that she will recoup her losses and also is her investment likely to drop further?

Nobody knows where or when the bottom of the market is. We may already be there. We probably aren't. But 5 years is a long time.

As I understand it, there are no exit fees on this product. It may be worth her taking advice from an IFA (Halifax are tied agents selling only their own products). They may well suggest that she switches to an alternative fund - if they do make sure she fully understands the type of investment, the risks involved and the charges for doing so. One risk would be that a new fund underperforms where she is at the moment!

To answer your questions:

1) I think it will fall further in the short term
2) I think it will more than recoup its losses over time

I may be right or wrong on both counts!