Investing for the unemployed

thedeerhunter270

I’m currently unemployed, but not claiming benefits. I have 65k to invest.

I’ve been to a couple of banks enquiring about investing the money for income – both have come back and said FSA rules don’t allow them to help me due to my circimstances, apart from savings accounts.

So, what should I do?

TIA

jem16

Never see a bank for investments. Always see an IFA.

thedeerhunter270

I appreciate the advice - but wouldn't an IFA be bound by the same rules as a bank?

FATHEROFTWO_2

Banks are generally tied to certain products whereas perhaps a few hundred choices that arnt necessarily the best and IFA will offer whole of market

jem16

They are governed by FSA rules but not being allowed to help you invest doesn't sound like one of them.

This guideline published by the FSA mentions investing after losing your job so I doubt it's totally against the rules.

http://www.moneymadeclear.fsa.gov.uk/guides/work/losing_your_job.html

Of course what I don't know is your specific circumstances.

savetilibleed

thedeerhunter270 wrote: »

I’m currently unemployed, but not claiming benefits. I have 65k to invest.

I’ve been to a couple of banks enquiring about investing the money for income – both have come back and said FSA rules don’t allow them to help me due to my circimstances, apart from savings accounts.

So, what should I do?

TIA

You mean they won't take your money? What sort of investments are these? If they are fixed interest accounts in building societies there should be no problem.

Reaper

You'll have to wait for one of the IFAs to come along and answer that question but here is my take.

Bank advisors work on commission and it would probably be considered bad advice to encourage somebody with no earnings to put their savings in anything remotely risky. Those products that are free of risk (eg savings accounts) earn no commission so they are not really interested in talking to you, though the counter staff happily will. I doubt it is really an FSA rule.

IFAs can work on a commission or fees basis. If they have no prospect of earning any commission then it would be fees.

There is not really any such thing as "investing for income". In most cases you invest money and take a certain amount out each year. If you take out more than it has grown that year (if it did) the fund will begin to shrink, if you take very little it will grow.

There are a few fixed interest products such as bonds and gilts, but even they fluctuate in value during their lifetimes. I am struggling to think of any others.

Why are you looking at investments rather than savings? Is this money you can afford to risk? Do you need access to it in the short term?

rupee99

It's doubtful that the bank cannot advise you because you are unemployed, more likely that the person to whom you spoke, or the branch, did not have the appropriate qualifications.

Any investment adviser will need to know your full circumstances. If the person was a, tied, adviser at the bank they might have thought it inappropriate for a person in your position to put your money into anything other than savings accounts. An IFA will take your full situation into account and may, or may not, come up with the same advice.

thedeerhunter270

savetilibleed wrote: »

You mean they won't take your money?

Not for anything more risky than a savings account they wouldn't. I have a couple of pensions, so it’s not like I have to rely on the money in retirement should it be lost.

thedeerhunter270

rupee99 wrote: »

It's doubtful that the bank cannot advise you because you are unemployed, more likely that the person to whom you spoke, or the branch, did not have the appropriate qualifications.

I went to two banks separately; and saw a financial advisor; both came back with similar answers. In fact in the initial interview, both hinted they not be able to offer me more than the most basic savings accounts.

thedeerhunter270

Reaper wrote: »

Why are you looking at investments rather than savings? Is this money you can afford to risk? Do you need access to it in the short term?

That is a good question really. I assume better return?

I could afford to lose the money, albeit, it would hurt a fair bit.