Comment please?...

Guichet_De_Fortune

I am looking to make 3 separate investments with Scottish Widows:-
2x £50K and 1 x £150K in their Flexible Options Investment Bond portfolio - Discovery Solution Funds. I am happy to keep them in for at least 5 years. As this amounts to £250K what are thoughts about their security - Government owned bank and all that...

opinions4u

It's not the security of the company that matters.

It's the security of the underlying funds.

dunstonh

as this amounts to £250K what are thoughts about their security

Generally an expensive product compared to rest of market. Funds are designed to be sold by low skilled sales reps in the branches to low knowledge consumers.

There are far better options available.

One would also assume the advice was to utilise the S&S ISA allowance (assuming you havent used it)? If not, then its a potential mis-sale. What was the reason an investment bond tax wrapper was being recommended over the unit trust version? Its possible a cost/tax analysis could indicate the bond wrapper is better but if this is being bought through a LloydsTSB branch, then it may not be (most expensive way to buy SW products). Has the sales rep provided you with the information on why the bond is better? (note banks oversell the bond wrapper as they make more from it).

what are thoughts about their security

its unit linked so it doesnt matter about the provider in the same way a savings account does.

If you really really really want a product owned by the Lloyds bank group and assuming the investment bond wrapper is most suitable then Clerical Medical investment bond is usually cheaper than Scottish Widows.

Cautious_Investor_3

Hi

Where did you get your advice from, a SW tied agent via a bank or an IFA?

As other posters have said I'd like to know why they have not suggested you invest into the funds via an ISA for at least £10,200.

An onshore Investment Bond could indeed be the most suitable tax wrapper for you but I'd at least ask for a copy of the comparison between the Investment Bond and an OEIC.

Also £250k in one fund, sounds rather a lot to me, you are putting a lot of faith in the manager of this fund. A quick look on the Scottish Widows website shows that the Scottish Widows Discovery Life Fund has produced a cumulative return of 3.1% over the past 3 years. You'd have been better in a deposit account over the past 3 years! Furthermore when you look at the top 10 holdings, nine of them are Scottish Widows funds.

I do hope I'm looking at the correct fund, the link below takes you through the the fund fact sheet:

http://factsheets.financialexpress.net/scow/ADI.pdf

I'd take a 2nd opinion via an IFA and think of some alternatives, the worst that will happen is you feel better about the original recommendation.

The Cautious Investor

feesarefare

Guichet_De_Fortune wrote: »

I am looking to make 3 separate investments with Scottish Widows:-
2x £50K and 1 x £150K in their Flexible Options Investment Bond portfolio - Discovery Solution Funds.

and why would you be looking to do that?

how did you rule out all the options?

Guichet_De_Fortune

dunstonh wrote: »

Generally an expensive product compared to rest of market. Funds are designed to be sold by low skilled sales reps in the branches to low knowledge consumers.

There are far better options available.

One would also assume the advice was to utilise the S&S ISA allowance (assuming you havent used it)? If not, then its a potential mis-sale. What was the reason an investment bond tax wrapper was being recommended over the unit trust version? Its possible a cost/tax analysis could indicate the bond wrapper is better but if this is being bought through a LloydsTSB branch, then it may not be (most expensive way to buy SW products). Has the sales rep provided you with the information on why the bond is better? (note banks oversell the bond wrapper as they make more from it).
its unit linked so it doesnt matter about the provider in the same way a savings account does.

If you really really really want a product owned by the Lloyds bank group and assuming the investment bond wrapper is most suitable then Clerical Medical investment bond is usually cheaper than Scottish Widows.

Source: LTSB Private Banking Advice

The suggested investment does indeed exploit the ISA allowance.

Appreciate the advice and will act on it. The big question we would all love the answer on of course is where are interest rates headed. If I was confident they would average out over the next 5 years at 6% or so with concurrent low inflation of -3% I would be tempted to just put it in savings and not risk any capital.

Thanks for your time

Rob_192

Guichet_De_Fortune wrote: »

Source: LTSB Private Banking Advice

Great to see LTSB Private Banking offering such good impartial advice;)

dunstonh

Source: LTSB Private Banking Advice

They are meant to be a discretionary management service. Not selling in-house products and funds. The advise from LPB is pretty poor. Although consistent with other LPB recommendations I have come across. Get a real advice firm to give you advice. Seek out a local IFA and go fee basis.

SW have announced yesterday that they are killing the clerical medical brand but using their investment product instead of the SW one.

Baldur

dunstonh wrote: »

They are meant to be a discretionary management service. Not selling in-house products and funds. The advise from LPB is pretty poor. Although consistent with other LPB recommendations I have come across.

Having been 'courted' by LTSB Private Banking a couple of times over the past 14/15 years, I'm glad that I followed my instincts and declined their services.