With profits Aviva Portfolio Fund

alsace-dave

I've recently inherited some money (approx £100K) & have had a meeting with Financial Planning Manager at NatWest (where my current account is). He is recommending that I invest £50k in an Aviva Portfolio Bond. I'm a little concerned now having seen horror stories of MVRs etc. Can anyone offer any advice? Thanks

dunstonh

have had a meeting with Financial Planning Manager at NatWest

Thats a bad start and it isnt going to let us down......

I'm a little concerned now having seen horror stories of MVRs etc

The Aviva portfolio bond doesnt have any MVRs. There are over 100 funds available on the portfolio bond (IFA version). Only one fund has an MVR but that is at fund level and not product level. If you are not investing in that particular fund then you cannot be charged an MVR.

Can anyone offer any advice?

See an IFA. Not a sales rep from a bank.

A few years ago, Aviva was one of the best investment bonds going for price. However, that is no longer the case as they have adjusted their pricing and it tends to be closer to mid table now. So, there are better options.

Also, £50k would be unusual for an investment bond. Typically, you would expect a stocks and shares ISA and unit trusts as the recommendation. That is unless you have fully utilised your S&S ISA allowance and you are a higher rate taxpayer or you have fully utilised your CGT allowance and will do again in future years.

If you are not a higher rate taxpayer, havent utilised your S&S ISA allowance and are not using your CGT allowance then this is a mis-sale case waiting to happen.

Natwest being tied cant offer you the best options. They operate on maximum initial commission basis (where investment bonds pay around 7% compared to 3% for S&S ISAs and UTs. So, basically, it looks like you are being sold a product that is not the best option (or close to it) either on the grounds of product provider, or tax. A typical bank mis-sale.

alsace-dave

Thanks for the advice. Glad that MVRs don't apply, but take your point about NatWest being tied to Aviva. I've used my full allowance of ISA (£5100 cash ISA/£5100 S&S).

dunstonh

I've used my full allowance of ISA (£5100 cash ISA/£5100 S&S).

Have you used your £10k CGT allowance? Are you likely to?
Are you a higher rate taxpayer?

If not, then its likely to be a mis-sale.

alsace-dave

I've not used my £10K CGT allowance, but I am borderline to being a higher rate tax payer. I will now look around to see what better alternatives. I take it you can't advise? Thanks anyway for your help.

dunstonh

I've not used my £10K CGT allowance, but I am borderline to being a higher rate tax payer.

Not a problem. You put the higher yield funds in the ISA and put low or no yield funds in unit trusts. Next April you bed & ISA and do that each year until the lot is inside the ISA. No CGT to pay and you avoid the 20% Corporation tax that would be paid with the investment bond.

I take it you can't advise?

Not on the board, no. Only real life.

Just get a local IFA to look at it. They can wipe the floor with a bank sales rep every time.