Investing a windfall - advice needed

GreenBoy_2

Hi

recently recieved a lump sum from my late uncles will, and want to know what to do with it.

The sum is for arguments sake £20k.

Given that the savings rates are rubbish should i look to do something different with it?
I went into a few banks yesterday and found the responce from them to vary wildly.

MyBank, HSBC was no more help than giving me some leaflets (i should point out that going into town was a last minute decision, and i was dressed for a day of DIY and gardening, and unshaven), and did look rather aghast when i asked did they have special rates for premier customers? (it just nice to toy with them to see if they start being nice - good to see it makes no difference at all ) They did not ask how much i had to invest nor ask me if i would like to come in for a chat with an advisor, so i left. You might think they didnt want my money.

I deposited the check in my building society (abbey)- just somewhere to keep it whilst i work out what to do, and got a completely different reaction - i was amost not allowed to leave without making an appointment to see an adviser next week.

went into a couple of smaller building societies, and was just handed leaflets and told to come back if i had questions. Again no one asked how much i had to invest.

lastly went into Lloyds - and the responce was very differnet - they asked about how we felt on invsting in shares and when we told them we knew nothing about them, and were a little nervous given the markets. They explained how although there are no guarantees the market is growing again at the moment, and put several options on the table... which has givent me food for thought

So - i am now here asking your opinions. Do i invest, take out ISA's for me and the wife, pay of part of my mortguage etc etc...

Thanks for any advice
Dave

gozomark

how much of your money are you prepared to lose ?
how long are you prepared to leave it saved or invested ?

Aegis

GreenBoy wrote: »

Hi

recently recieved a lump sum from my late uncles will, and want to know what to do with it.

The sum is for arguments sake £20k.

Given that the savings rates are rubbish should i look to do something different with it?
I went into a few banks yesterday and found the responce from them to vary wildly.

MyBank, HSBC was no more help than giving me some leaflets (i should point out that going into town was a last minute decision, and i was dressed for a day of DIY and gardening, and unshaven), and did look rather aghast when i asked did they have special rates for premier customers? (it just nice to toy with them to see if they start being nice - good to see it makes no difference at all ) They did not ask how much i had to invest nor ask me if i would like to come in for a chat with an advisor, so i left. You might think they didnt want my money.

Quite surprising really, HSBC staff are usually desperate to get customers in front of one of their multi-tied advisers. Potentially a lucky escape though!

I deposited the check in my building society (abbey)- just somewhere to keep it whilst i work out what to do, and got a completely different reaction - i was amost not allowed to leave without making an appointment to see an adviser next week.

Be careful with Abbey. Like most banks they have tied advisers who sell expensive products from a very limited range of options, often specialising in FTSE-linked products which tie your money up for 5-6 years. Definitely look around to see if you can find a better deal.

Just for information, Abbey demutualised a some time ago, and is now a bank owned by Santander, the same banking group that also owns Alliance and Leicester.

went into a couple of smaller building societies, and was just handed leaflets and told to come back if i had questions. Again no one asked how much i had to invest.

lastly went into Lloyds - and the responce was very differnet - they asked about how we felt on invsting in shares and when we told them we knew nothing about them, and were a little nervous given the markets. They explained how although there are no guarantees the market is growing again at the moment, and put several options on the table... which has givent me food for thought

All banks should be interested in getting hold of your money at the moment. For £20k you'll almost certainly be looking at a minimum initial charge of £600 for fairly low-standard "advice" paid out of the product commission. Typically you'll then pay of half that each year again in fund charges, some of which will also be paid to the bank as trail commission.

If you wanted to do some research and invest the money yourself you would almost certainly be able to save the entire £600 and a chunk of the ongoing charges too. Failing that, if you still wanted advice you might well be able to find an independent financial adviser who might be able to offer a lower fee. Even if the fee came out the same, an IFA has a much wider selection of investment products than a bank adviser, and as such should be able to find something cost-effective and suited to your needs.

So - i am now here asking your opinions. Do i invest, take out ISA's for me and the wife, pay of part of my mortguage etc etc...

Depends on a lot of factors really, and this is where talking to a professional is useful. You should discuss all of the following:

• Mortgage balance
• Current property value
• Affordability of ongoing interest payments
• Ability to remortgage in future (i.e. loan to value)
• Term of the mortgage/term of the investments
• Predicted annualised investment growth rates using available tax-efficient structures
• Attitude to risk
• Other financial issues: retirement planning, kids going to school, moving house in a couple of years, etc.

Basically there's a lot to discuss before you can make the decision as to whether you should invest or not.

Sorry that this isn't a recommendation either way, but recommendations should be made by people who know the whole story (and ideally you shouldn't take a recommendation from an anonymous forum-dweller in any case!)