Top Child Trust Funds Article Discussion Area

RaspberryFool

We have a CTF and 3 Personal Investment Plans (PIPs) for the children with F&C. F&C were specifically chosen for the low charges on these plans. The introduction of admin charges on these 4 accounts now makes them untenable. The CTF would be in deficit by the time the child reached 18!

Interestingly, the FSA's guidance requires that, if changes in the contract are imposed, then exit charges must be waived to remove financial barriers to exiting the contract. So far, F&C have not had the courtesy to answer our web-site query regarding this. We may have to involve the FSA. Perhaps if all the other dissatisfied customers wrote in and complained, then we may see some action?

The FSA guidance is available at http://www.fsa.gov.uk/static/pubs/guidance/fg12_02.pdf

RF

Cliffo

Hi Guys,
I've been following this thread before deciding what to do - have got 3x CTF in F&C Global Smaller Cos. and had the letters.
Just also seen situation this Saturday morning on BBC News Breakfast - presented by Paul Lewis, Money Box (of Radio 4)
Has Martin had a go yet on ITV?
I also made personal complaint back to F&C but just got rubbish reply suggesting I transfer elsewhere (like letter it did not even mention their stakeholder switch option)
John

Tarquinius

RaspberryFool wrote: »

We have a CTF and 3 Personal Investment Plans (PIPs) for the children with F&C. F&C were specifically chosen for the low charges on these plans. The introduction of admin charges on these 4 accounts now makes them untenable. The CTF would be in deficit by the time the child reached 18!

Interestingly, the FSA's guidance requires that, if changes in the contract are imposed, then exit charges must be waived to remove financial barriers to exiting the contract. So far, F&C have not had the courtesy to answer our web-site query regarding this. We may have to involve the FSA. Perhaps if all the other dissatisfied customers wrote in and complained, then we may see some action?

The FSA guidance is available at http://www.fsa.gov.uk/static/pubs/guidance/fg12_02.pdf

RF

I may have missed something here - just to be clear are you saying that F&C are imposing exit charges if we decide to move the investment elsewhere? How do we know this? If so, this is getting worse by the minute :mad:

RaspberryFool

The exit (transfer) charges for their PIP are available at http://www.fctr.co.uk/changes/changespip/faq.html. It states "There is a charge of £12+ VAT per type of share transferred".

For the CTF (http://www.fctr.co.uk/changes/changesctf/faq.html), it does not explicity state what the charges (if any) are. I suspect that they may be buried elsewhere in their T&Cs.

RF

Reaper

RaspberryFool wrote: »

For the CTF (http://www.fctr.co.uk/changes/changesctf/faq.html), it does not explicity state what the charges (if any) are. I suspect that they may be buried elsewhere in their T&Cs.

There are none, unless you count the bid/offer spread when buying and selling shares. Better still if the value of the CTF is under £250 they will add £20 to the value of the account to encourage you to leave.

Cliffo

I cannot post proper links yet, but there is an article in today's Telegraph (www . telegraph . co. uk) called "Child Trust Fund prisoners hit with new fees".

I am sure there will be someone in the offices of F&C monitoring the media and indeed reading these forums. All I can say to you without swearing is that you should be ashamed of your actions in pilfering these CTF's - and especially considering the small amount of extra income you will gain overall but suffer future considerable loss of custom from angered parents and when children grow up, etc. There is still time for a respectful U-turn and exempt these charges for CTF accounts.

wriggly

snowcat53 wrote: »

Further to the discussion as to whether the CTF Shares account is more expensive than the Stakeholder, I have gone back to some old factsheets re the fund charges and management fees for the F&C Investment Trust (which is the usual choice for the Sharess account.
This is what I found

Date/ Total expenses /Mgt fee rate
Jan 2007/ 0.45% / 0.15%
Jan 2009 /0.53% /'fixed fee £6.1 m pa'
Dec 2012 /0.92% (ongoing charges)/ '0.365%

The total cost now for the Shares account with this fund is therefore 1.285%. plus the new annual fee
For the Stakeholder the cost is 0.7% plan charge plus the Allshare tracker charges which are not stated (that i can see) but total charge capped at 1.5%. I might bet they are charging the full 1.5%.

So there seems no doubt that the F&C IT expenses have increased dramatically (more than doubled) in 6 years. I am sure this has never ben flagged up in any of their bumpf.
Am i minsinterpreting? Can they justify this?

I have previously been viewing F&C as a cheap S&S CTF account but this changes my view.

The Management Fee is included in the TER/OGC, so you do not need to add it. You should just compare the TER/OGC, but be aware that OGC includes some additional charges that may not have been included in the TER. Assuming the additional costs from TER to OGC were consistently 0.4%, the amount by which the cost increased following the introduction of OGC, the best estimate of your actual costs were:

Date: estimated OGC
Jan 2007: 0.85%
Jan 2009: 0.93%
Dec 2012: 0.92%

So, the costs for FCIT have stayed around the same.

If you have £10,000 invested, the new fee will increase the effective OGC to 1.22%.

If you have £250 invested, the new fee will increase the effective OGC to 12.9%! Get out now!

ViksB

I was thinking of signing this epetition. I am sure it won't make much difference but I would really like the rules to change.
http://epetitions.direct.gov.uk/petitions/45469

Tarquinius

I've topped up my CTF with F&C twice within the past two months - I would not have made my investment had I known about the change to charges.

I called F&C to say I wanted to be able to withdraw my additional top as I was committing to an investment that has since significantly changed and I would not have made that decision knowing what I do now. But no joy - they just repeated the standard line that no withdrawals are possible from a CTF. I also registered my disappointment and they said they were registering all comments and taking them back to 'senior management' for consideration.

I've written to my MP, campaigning for alignment of CTFs with JISAs and specifically highlighting the plight of F&C investors. Suggest others do the same.

Now trying to decide what to do next - there seem to be three popular options:
1 Convert to a Cash CTF - interest rates of about 3% ish, no risk

2 Convert to stakeholder with F&C - invested in FTSE All Share tracker with charges currently totalling about 1.1% ish per year. (Personal view: I think the UK stock is in for a period of lowish growth for the next few years - could even move backwards a bit?)

3. Convert to Selftrade Shares CTF. Best option apart from it isn't really economic to make small ocassional further investments (eg £100 at birthdays and xmas from grandparents) because there is dealing charge.

I haven't come across many other good options yet...

Tarquinius

ViksB wrote: »

I was thinking of signing this epetition. I am sure it won't make much difference but I would really like the rules to change.
http://epetitions.direct.gov.uk/petitions/45469

Thanks for the link

Signed!

Bit disappointing it has so few signatures...I wonder if MSE could encourage more to sign via the weekly email?