Investment Bonds

Supernova

Deemy wrote:

Your doing pretty well !

One arbitrary stroke of a finance director's pen and I'm redundant

Deemy wrote:

do you work in the public sector ?

IT, large US corporation

Supernova

defender_of_the_weak wrote:

Why not use some of the funds to reduce your mortgage debt,

Right, I wondered if it was better keeping the money and investing but I've never managed to calculate whether it was better or not. I suggested it to the IFA and he said don't pay it off, convert £15K to repayment and extend the term to age 60. I still don't think I have a grip on the totality of my situation to make a decision yet.

I shall ponder a bit more over the Investment Bond info people have kindly contributed and bump this up for when everyone is back on Monday.

Supernova

Chrismaths wrote:

I'd get your pension arrangements reviewed by a decent financial planner

On Thursday I got in touch with another IFA who used to deal with the L&G Group Personal Pension I have hanging around with £14K in it. He said he'd do a free review and then take it from there.

Chrismaths

Be very careful of 'free' as it can be very expensive! - a bit like those 'free' brake checks garages advertise, then charge you the earth if they do any work.

A good rule for selecting an IFA is - If I pay them, they work for me, if an insurance company pays them, they work for the insurance company.

Also, ask him if he's got G60 (the IFA's pension exam).

dunstonh

G60 is obsolete now. Its been replaced with two new ones. Although G60 or the new ones arent required for personal pension switches.

defender_of_the_weak

Dunston I dont have a problem with your generic defence of bonds, as with all financial advice, opinions differ as to suitability. My issue is with the original adviser who is recommending something that carries too high a charging structure. At the end of year one how much will the bond be worth, more than putting it on deposit or using the money to reduce mortgage debt, or less.

Why extend a mortgage to age 60, even on repayment. Traditional banking wisdom, from the old days always espoused the view that you should wherever possible reduce debt as you approach retirement to take the pressure off the finances.

A steady proportion of the cases we handle relate to investment sales and invariably lead to compensation of thousands rather than hundreds of pounds.

G60 is still the most widely recognised pension qualification and I would not talk pensions, particularly in light of the recent changes, with any adviser that does not hold it. Even for a personal pension transfer.

dunstonh

My issue is with the original adviser who is recommending something that carries too high a charging structure. At the end of year one how much will the bond be worth, more than putting it on deposit or using the money to reduce mortgage debt, or less.

Charges are not the only reason for recommending a product. Quite often the cheapest product is not recommended because of features not present which are required or a fund range that doesnt allow the investments you want. You will rarely get a complaint upheld because xyz company could do it cheaper. However, where those funds or features are not used and you go with the expensive option, then you do make it harder to support your justification for choosing them.

Why extend a mortgage to age 60, even on repayment. Traditional banking wisdom, from the old days always espoused the view that you should wherever possible reduce debt as you approach retirement to take the pressure off the finances.

How it has been written on this thread, the extension of the mortgage does seem rather strange. Although we dont know the full story.

A steady proportion of the cases we handle relate to investment sales and invariably lead to compensation of thousands rather than hundreds of pounds.

And I wonder how many of those are down to poor documentation held rather than being real mis-sales. Also, in the context of the numbers sold, upheld complaints are a minority.

I do know where you are coming from as i have said already that they are oversold and some are just asking for trouble. That being said, my network has been saying for some time that the ambulance chasers will move onto investments next and that research documentation and recommendation reports need to be higher standard than in the past.

G60 is still the most widely recognised pension qualification and I would not talk pensions, particularly in light of the recent changes, with any adviser that does not hold it. Even for a personal pension transfer.

G60 may be the old standard but it is obsolete. You cannot sit it any more and it is not fair to remove those holding the new replacement qualifications from your list of potential advisors.

EdInvestor

To compare the effect of charges on different companies' investment bonds,try the regulator's site:

https://www.fsa.gov.uk/tables

The commission to the advisor is unfortunately only part of the story

dunstonh

EdInvestor wrote:

To compare the effect of charges on different companies' investment bonds,try the regulator's site:

www.fsa.gov.uk/tables

The commission to the advisor is unfortunately only part of the story

I apologise to those who think they are in a groundhog day scenario but if Ed keeps repeating this with no qualification then I have to repeat it as well.

The FSA tables are not a reliable guide to charges or commission on investment bonds. They assume full commission taken and they assume one default fund. You cannot compare bonds on that basis. The FSA also publish commission taken on bonds (and most other regulated products) and it shows the average commission taken by IFAs is much lower than the maximums.

You could consider the FSA tables above being similar to RRP on a retail product. This is what the retailer recommends but you can get it cheaper by shopping around.

The commission to the advisor is unfortunately only part of the story

Ed is reminding you that Investment Bonds can actually be cheaper than other investment tax wrappers so can be very good advice when used correctly.

defender_of_the_weak

Dunston

There are many thousands more G60 holders than the new replacements and no I don't necessarily think the new exam holders should be excluded. I was trying to aim at 'more than FPC' as a benchmark fr an adviser.

The investment advice cases have all been upheld because the sale was unsuitable, not because they lost the paperwork. Nothing dates back more than 10 years when realistically the supporting documentation should be very sound. Let me be quite clear on this, on some of the documentation we have seen it is very clear to see

SOME ADVISERS LIE. They write down what the company expects to see rather than the truth of their clients circumstances so the customer fits the sale rather than the other way around.