investec structured products

dunstonh

shazkhan111 wrote: »

Surely this is better than the Premier one:

http://www.investecstructuredproducts.com/products/products_ftse100_RPI_plan7.html

Premier are going to be launching a new one. Remember that the later issue always has an advantage over the rest of the market as they can see whats on offer.

With the date on the investec one being in June, i would be inclined to hold until the Premier launch. That way you get to pick which one. That said, the investec one looks good for income.

musehead

The Investec product is quite complicated for tax purposes. The 2% payment each quater is treated as return of capital (tax free) but the extra RPI indexation (if added) is subject to income tax. You are then charged capital gains tax on upto 40% of your returned capital at the end.

I think the favourable tax rules and RPI indexation make this quite a bit better than the Premier income product.

I suppose you have to pay comission with this one though.

dunstonh

I suppose you have to pay comission with this one though.

You dont pay it on either of them. Its not an explicit charge against the capital. So, the provider takes the hit (and factors it into the terms of the plan). Rebates are possible though which can enhance the terms. So, get an IFA to do it on execution only (if investect wont take the app directly) and get a rebate at the same time.

shazkhan111

dunstonh wrote: »

So, get an IFA to do it on execution only (if investect wont take the app directly) and get a rebate at the same time.

dont get this please explain? Sorry

musehead

I noticed on the Premier product that the commission paid to the IFA is taken from your capital, so 3% commission on a £10k deposit leaves you with £9700 in the plan. You can avoid this by going directly though. So the commission on the Investec product is paid from Investec's pocket rather than your capital?

I presume that execution only means they literally just sign and send off the application for you with no advice or anything, and may be willing to share half the commission or thereabouts.

dunstonh

noticed on the Premier product that the commission paid to the IFA is taken from your capital. so 3% commission on a £10k deposit leaves you with £9700 in the plan.

I just did a speed read on issue 42 and it says its not taken from your capital but factored into the pricing of the product. So, that means 100% is invested.

So the commission on the Investec product is paid from Investec's pocket rather than your capital?

Yes. Its factored into the published terms. If it wasnt the annual rate would be a tad higher.

I presume that execution only means they literally just sign and send off the application for you with no advice or anything, and may be willing to share half the commission or thereabouts.

Yes. Execution only saves a lot of work (about 3-6 hours less than advice) and removes a lot of the lifetime of liability as you cannot complain about advice if you dont get any. So, IFAs will usually rebate (or enhance product terms) by taking less commission.

dont get this please explain? Sorry

Hopefully the above explains it more. However, ask again if not.