Lloyds TSB Private Banking - Any Good?

jacegirl

Hi, I'm new here so please bear with me and excuse any mistakes.

My husband and have £400,000 from a recently matured investment to re-invest. It primarily represents our cash fund. We are both semi retired, in our late 50's and seek to take an income from this, from time to time, to top up our main income from some rental property we own. With no good future earning potential we intend to take a cautious approach when investing this money and ease of access, at least to some of it, would be useful.

This money currently sits in a special, short term, instant access account that Lloyds TSB have set up for us and we have been approached by their Private Banking Asset Management Service to use their Investment Portfolio Service to manage this money, over a 5 - 10 year period, in a cautious multi-managed portfolio, tailored to suit our needs. This would typically be made up of 40% bonds, 10% property, 20% equities and 30% "alternatives" - absolute return and commodities. They have told us that we could expect to receive a return of around 5.5 - 6% (I believe after their costs of 1% per year), based on recent performance and that the cautious managed approach would help to ensure the safety of our capital. There is an initial set up fee of 1.5%.

This does found much better than us adopting a DIY approach, particularly as bank interest rates look set to remain very low. However, we are loath to take the plunge of allowing someone else to manage our money and may just plumb for the best bank rate we can find.

Does anyone have any experience of Lloyds TSB Private Banking that they may care to pass on please? Thank you for any feedback.

dunstonh

Lloyds TSB Private Banking - Any Good?

Its good for the IFA that you will end up going to in future years when you are fed up with LPB and realise how expensive they are. The IFA will have no problem coming in better.

to manage this money, over a 5 - 10 year period, in a cautious multi-managed portfolio, tailored to suit our needs.

Yet they all seem to contain scottish widows unit trusts within them. SW owned by Llloyds. Whose needs are they servicing?

I believe after their costs of 1% per year

On top of the charges for the investments.

There is an initial set up fee of 1.5%.

You can get cheaper than that if you go fee based.

This does found much better than us adopting a DIY approach

Depends on your skills and knowledge and the level of servicing you would give it.

A fee based IFA would be cheaper and with that amount you should be able to get in with the owner/director/partners which would give you consistency of contact (LPB are very poor on that front and suffer significant staff turnover- normal for the banks)

Nothing wrong with the idea of what you are doing. You are just looking to buy the services from an expensive and lower quality distribution channel.

missile

jacegirl wrote: »

Does anyone have any experience of Lloyds TSB Private Banking that they may care to pass on please? Thank you for any feedback.

I was in a similar position to you with investments, property and cash. My strategy was (and still is) to sell property as and when it becomes vaccant. I find the return on property rental is not as good as it once was. One rougue tennant can cost a lot of money and cause a lot of heartache.

You have built up a nice nest egg. I would suggest that you can afford to be conservative with your investment strategy.

My LTSB Private Banking Advisor is very nice, but I did not rate their investment products.

jonesMUFCforever

dunstonh wrote: »

Its good for the IFA that you will end up going to in future years when you are fed up with LPB and realise how expensive they are. The IFA will have no problem coming in better.


Yet they all seem to contain scottish widows unit trusts within them. SW owned by Llloyds. Whose needs are they servicing?



On top of the charges for the investments.



You can get cheaper than that if you go fee based.



Depends on your skills and knowledge and the level of servicing you would give it.

A fee based IFA would be cheaper and with that amount you should be able to get in with the owner/director/partners which would give you consistency of contact (LPB are very poor on that front and suffer significant staff turnover- normal for the banks)

Nothing wrong with the idea of what you are doing. You are just looking to buy the services from an expensive and lower quality distribution channel.

I did think that the Private banking side was more independent and would not advise on Scottish Widows unless the customer specifically asked for this.

dunstonh

I did think that the Private banking side was more independent and would not advise on Scottish Widows unless the customer specifically asked for this.

I know. Yet I have taken on two LPB portfolios in the last 2 years and both were heavy in Scottish Widows unit trust funds.

Typically, Discretionary investment managers would use direct investments as well or possibly even institutional funds. Yet these were the standard retail funds at standard cost and commission (with the LPB charge on top).

If you are going to use unit trusts then you may as well use an IFA. If you want a more advanced portfolio with specialist and direct investments then a discretionary management service from a dedicated firm would be better than a bank.

Onawingandaprayer

Personally, I'd NEVER go to a bank for investment advice - and I speak as someone whose late father was a bank manager (in the days when they had proper bank managers - and in the days when they just offered banking!!!)

jacegirl

Thank you very much to all of you for answering my queries, although I must admit that I am a little confused. It does appear obvious though that Lloyds Private Banking doesn't rank very highly as far as you are all concerned.

There are a few comments that I think need addressing. Dunstonh - the Lloyds adviser did specifically tell us that they would not be using Scottish Widows. In fact he agreed with us when we told him that we did not rate S W! We seem to recall that he told us the 1% annual charge included all dealing and associated charges. Trying to pick a local IFA is also a giant leap in the dark for us!

Missile - thanks very much for your advice. The yield on rental properties is indeed poor but we have only had one bad tenant in 10 years averaging 3 properties, not bad but still sickening. We hope that the property values will eventually recover and allow us to get a better return than the stock market and with less risk.

jonesMUFCforever - this is what we have been led to believe.

Onawingandaprayer - very worrying indeed, but a helpful warning - thanks!

dunstonh

the Lloyds adviser did specifically tell us that they would not be using Scottish Widows.

If you said you didnt want them then he can exclude them in his remit. However, the ones I have seen have been heavy in SW. So, he was either reacting to your comments and including them as an exclusion and didnt have the bottle to tell you that whilst many of their funds are naff there are some exceptions.

In fact he agreed with us when we told him that we did not rate S W!

They do have a couple of good funds. Mainly on the SWIP side rather than the SW side or the ex Lloyds/Black horse rebadged range.

We seem to recall that he told us the 1% annual charge included all dealing and associated charges

That is not the case. Its in addition to fund charges. Where they use direct investments (shares, gilts etc) then there is no fund charges on those. However, where they use funds, there will be.

Trying to pick a local IFA is also a giant leap in the dark for us!

No more of a leap than using a salesforce at a bank (and dont kid yourself that LPB is not run as a salesforce). Statistically, IFAs have under 2% of complaints at the FOS. Banks have over half. IFAs have consistently had lower complaints year on year for about 5 years now. Things are not perfect but as long as you go with a servicing IFA on agreed fee basis then you should save a lot of money (initial charge down to about 1/3rd of LPB and around 0.5% p.a.). If you specifically want a DIM service rather than an IFA, then you can get the IFA to refer you to a dedicated independent DIM rather than one working for a bank.

jacegirl

Thank you very much for this breakdown Dustonh - much food for thought here!

confusedinvestor

Late in the day to add anything but I have to say that an IFA who I'd used for many years (during which he made good £ from selling me insurance etc) saw it was his last chance when I retired with a large lump sum. He charged me £1500 for taking my financial information (cash deposits, equities etc) supplied on a spreadsheet and offering me a spreadsheet that showed my cash only (i.e. did zero with other assets) being used up as income from age 61 to age 104!!!

Lloyds TSB private banking however have spent hours going through all the assets, checking and rechecking my needs (and fears!) and came up with a cautious option, leaving a considerable amount of cash (for now at least) to keep me calm. I have to say that I would never use an IFA again. Banks may charge more but they'll a) always be there (I hope!) and b) even if one of their people screws up thay will fix things if only to save their reputation.

dunstonh

I have to say that I would never use an IFA again. Banks may charge more but they'll a) always be there (I hope!) and b) even if one of their people screws up thay will fix things if only to save their reputation.

There are currently around 30,000 IFAs. You saw one. Yet you make an opinion of the other 29,999 from that?

LPB are expensive, suffer high staff turnover and staff are subject to sales targets.

Lloyds TSB private banking however have spent hours going through all the assets, checking and rechecking my needs (and fears!) and came up with a cautious option, leaving a considerable amount of cash (for now at least) to keep me calm.

Doing the same as an IFA then.