Global Equity TESSA only ISA

westo_2

Newcastle building society

Hi,

In 2001 my parents old Tessa matured and they transfered the money into a Global Guaranteed Equity Bond TESSA ( Newcastle building society). Both my mother and father had £9000 each invested under their names. After going back through their old paperwork it seems my mothers investment was made in April 2001 in the 5 year investment scheme, while my father investment was made in the September of 2001. Since the scheme was for 5 years my mother investment has now matured and has returned 0% interest. My fathers on the other hand which is due to mature in September has a projected return of 17% (I think this is because his investment was made shortly after 9/11 and the share prices fell). So that is the background.

My parents have asked me to look into this, and quite frankly I don't have a clue. So the question is what are the options for the matured investment made by my mother. The Newcastle building society have informed her that the funds will mature into their Nova isa account or she can invest in either of their

*Guaranteed Property Bond/ISA or their

*Fixed rate ISA.

Obviously she isn't particularly impressed at making no profit over the 5 year span of the previous investment, but knew the risks.She isn't looking for huge returns just something to show for her money. They both have mini ISAs also.

Could anyone suggest the best course of action for this matured £9000 and for my fathers £9,000 when that matures in September.

Thanks for reading and regards

Marc

dunstonh

Guaranteed equity bonds are cash cows for the providers. There are far better equity investments.

GEBs give the impression that you have security and pay no/low charges. Charges exist but they are not explicit. You dont see them. Where are all the dividends over the 5 years? Also, why track one index which may or may not be the best place to be. The FTSE100 for example did nothing virtually over the last 5 years but the FTSE250 would have seen a significant gain. Stick all the money into one index and you may have got it right but you may have got it wrong.

You need to look at the investment areas first and then choose the product/provider to match those investment areas. I'm afraid that the offering you mention would not be one I would choose.

westo_2

Thanks for the reply.

the statements given from the Newcastle building society from what I have seen are awful, very vague and give few details of which index determine gains. There was no money paid anually the dividends all depended on the indices at the end of the 5 year period, or from what I can tell. So basically since the FTSE100, Dow Jones and Nikkei225 were all lower after 5 years than the start no interest was paid. As mentioned earlier as my father opened his after 9/11 the indicies were low so he may well receive a payout around 17% ( still rather low I thought for tying money up for 5 years).
What would your advise be with regard to the matured £9000, if not the options suggested in my original mail? Is it possible for them to recieve free independant financial advice, because quite frankly they seem to be asking me for advice and I have little idea?

Thanks again Marc

dunstonh

What would your advise be with regard to the matured £9000, if not the options suggested in my original mail?

I cannot give advice on the forums as you are asking about regulated financial services products. Based on what you have said so far, it couldnt be done anyway because there are around 8000 potential options for you and it would need more narrowing down.

Is it possible for them to recieve free independant financial advice, because quite frankly they seem to be asking me for advice and I have little idea?

Have you seen an independent financial advisor or a tied one? An IFA wouldnt be asking you for advice as it is their job to present the options to you. A tied advisor may well put a number of options in front of you as it is your job to choose from the options when you see a tied agent.

There is no such thing as free advice. It is either paid for by you or from charges built into the plan. However, that is still a lot better than getting advice from a bank or building society.

david78

Isn't this just a cash ISA? Can't you let Newcastle Building Society put the £9000 into there cash ISA product (Nova). You can then transfer to another cash ISA account if the interest on the Nova account is not very good.