Abbey, is this for real?

ajw1100

Went into Abbey yesterday to open a Super ISA V4 and accompanying Capital Growth Bond. Their Investment advisor stated that the guaranteed protection was £100k which is split equally between Long Term investments and Cash accounts, so if I had £50k in cash accounts and £50k in a 5 year investment both would be fully protected. I said I had read it was £50k per institution but the advisor was adamant the cover was £50k each.
Are they right?

Lokolo

Yes as investments have their own protection.

Although he got it wrong for saying £100k as it should be £98k.

You geto £50k for savings, then £48k for investments.

courtney22

it depends who the 5yr bond is with is it with legal and general?, as 50k would be classed as being with the abbey, and 50k would be classed as being with legal and general ( i think thats who they do their investments through) . Therfore you would have 100k protected...as 50k each institution...id double check paperwork to see who the bond is with.

Baldur

ajw1100 wrote: »

Went into Abbey yesterday to open a Super ISA V4 and accompanying Capital Growth Bond. Their Investment advisor stated that the guaranteed protection was £100k which is split equally between Long Term investments and Cash accounts, so if I had £50k in cash accounts and £50k in a 5 year investment both would be fully protected. I said I had read it was £50k per institution but the advisor was adamant the cover was £50k each.
Are they right?

I hope that the [STRIKE]salesperson's[/STRIKE] "Investment adviser's" reply made you think again about this dire product.

dunstonh

Went into Abbey yesterday to open a Super ISA V4 and accompanying Capital Growth Bond.

What on earth for? (guess from the tone as to what I think of it!)

The terms are easily bettered by seeing a real investment adviser and not a tied sales rep from the Shabby.

ajw1100

According to the Key Features the money paid will be used to buy shares in a protected cell of "Guaranteed investments products 1 PCC Ltd, a Guernsey protected cell investment company"
The above company "invests the net proceeds of the shares in financial instruments provided by Abbey National Treasury Services plc, which is a wholly owned subsiduary of Abbey National plc"

I cannot see any references to legal & general.

Having had an 'financial advisor' who lost me around £96k of my hard earned pension money and I'm now dealing with the FSCS to get back what I can.
I can only go with 100% safe investments (Other than the odd ISA) for the present as I am also now redundant

The CGP gives capital safety with a maturity of 11% plus 50% of the averaged FTSE growth up to a max of 40%, without charges to me. This may not be the best out there but in my case safe is a major factor.

You may slag it off as you wish, some will always slag things off as a matter of course, that's human nature!! Don't forget there is not a one size fits all.

dunstonh

I can only go with 100% safe investments (Other than the odd ISA) for the present as I am also now redundant

The Abbey structured product is not 100% safe. On a risk scale of 1 to 10 (1 being cash) then this comes out around 4/5.

without charges to me.

You mean without explicit charges. The charges are implicit and based within the terms. For example, loss of dividends compared to a real FTSE based investment is losing you around 2-3% a year. However, the terms are set after charges have been considered.

The cap of 40% is really low and is what kills the product.

You may slag it off as you wish, some will always slag things off as a matter of course, that's human nature!! Don't forget there is not a one size fits all.

It is being "slagged off" because its not the best. its also not the safest.

Its an awful product aimed at people that dont know any better. And that is why Abbey sell a lot of them.

ajw1100

It is being "slagged off" because its not the best. its also not the safest.

That's interesting, as in the blurb it states to "Guarantee your capital back if you leave it for the full term"

It also "Guarantees a minimum return at the end of the term"

I would have thought that this would be safe, it may not be the best though.

If you don't mind me asking what makes you say its not that safe?

Yes there are funds that pay out much better in % but the risk factor is correspondingly higher too.

Sitting in a savings account at some awful rate is surely a lot worse!

Lokolo

ajw1100 wrote: »

That's interesting, as in the blurb it states to "Guarantee your capital back if you leave it for the full term"

It also "Guarantees a minimum return at the end of the term"

I would have thought that this would be safe, it may not be the best though.

If you don't mind me asking what makes you say its not that safe?

Yes there are funds that pay out much better in % but the risk factor is correspondingly higher too.

Sitting in a savings account at some awful rate is surely a lot worse!

If inflation goes WAAAAAAAY up. You lose value in the money if you do not get a return.

dunstonh

That's interesting, as in the blurb it states to "Guarantee your capital back if you leave it for the full term"

Guaranteed equity bonds (to give them another marketing name) have come under criticism over the last 18 months for using the word guaranteed when in reality they are not. This all occured after those investing in some guaranteed equity bonds lost their money when they found out Lehmanns US underwrote the plans and there is no FSCS protection on the underlying assets.

You should see the amount of blurb that has to be written for compliance purposes nowadays when recommending such a plan. There are more risk warnings in place for these plans now then there is for unit linked investments.

Yes there are funds that pay out much better in % but the risk factor is correspondingly higher too.

If you are only looking at structured products, then there are ones with different risk levels but looking at the safer ones with AA or AAA rated assets propping them up then you can still get better terms that the Abbey one.

If you don't mind me asking what makes you say its not that safe?

Independent research is provided to IFAs. That risk rates and reviews the products. That sort of information wont be given to the sales rep at Abbey as they are do what they are told by their employer and sales manager. However, take a look at the following which gives a generic look at them.

http://www.moneymadeclear.fsa.gov.uk/products/investments/types/structured_products.html

simon_templar_2

Abbey use Royal London for the investments, the GCP and GGP are both risk free in terms of you get back exactly what you put in plus a minimum return at worst.