Towry/edward jones isa

Joannapovey

Hi has anyone been informed by Towry that they are giving you notice with regards to your ISA? I have been saving £100 a month for the past 53 months and the present market value for my ISA is £4564.35. Towry have decided that they no longer wish to deal with less that £100k+ accounts so have informed me that on 10 December they will be closing my account and sending me the money. I have two choices, one is to accept the money at the lesser value that I have invested. The second is to transfer the ISA but in their words "the process of transferring securities to another company, commonoly referred to as an 'in-specie transfer', can be very lengthy and you should be aware that it can take several monthys. There are also costs associated with this approach".

I am so cross that through no fault of my own the account is being shut yet I am expected to accept £735.65 less than I've paid in or pay myself to transfer the ISA. This ISA was taken out for my children so that one day when they/if they start University there will be some money towards this. I am also unsure what I should be doing with regards to payments up until 10 December as we have two more months direct debits that will come out before they liquidate the account.

I feel that the least this big company should do is refund the initial investment amount as if I had a choice I would be carrying this ISA on for another 10 years as was originally planned.

Please advise if anyone can!

Many thanks.

Cautious_Investor_3

Hi

I can see why this is a pain for you, however things do change.

You have two options as they outline in their letter, I'd make the following comments:

1. A transfer of your ISA from TL to AN Other provider shouldn't take too long, I'd say generally about a month although sometimes a little quicker

2. A transfer will help preserve the tax efficient status of the ISA i.e. I may be wrong but if you were to surrender it and re invest in another ISA with a different provider I think you would be breaking the ISA rules as you would have contributed to more than one ISA in a single tax year

TL will never "refund" your "loss" as you have not actually made a loss. I'd try and see the ISA as yours and that TL were just a temporary home for it and you now need to choose another home for it with a different provider.

I hope this helps, feel free to fire any other questions at me and I'll do my best!

The Cautious Investor

le_loup

Joannapovey wrote: »

if I had a choice I would be

You do have a choice. Find a new provider - look at Hargreaves Lansdown - amongst others, they will transfer the ISA for you and you will be in the same position as before. The transfer will take a few days.

pqrdef

Have to tread carefully round the libel laws here, as it's not clear who the villain is. There's a story that Edward Jones sold its UK business to Towry for £1, which suggests it was in trouble and Towry was the white knight.

You can't avoid the loss, it's in the past. The investment might recover, but then, starting from here, any other investment might do just as well or better. You do have to start from here.

The performance doesn't look too brilliant. Half of your payments went into the bubble before the crash, and the market isn't back to those levels, so you'd expect some loss there. But the rest of your money went into a depressed market and there should be a profit on that.

You need to ponder whether we're due for a double-dip. If so, you're lined up to lose a lot more if you stay in shares. On the other hand, a double-dip creates a good chance to recover your past losses, if you get out of shares before the trouble starts and then go back in at the bottom.

If you decide to stay in shares, there are two ways of doing an ISA transfer, as shares (if your new provider will take them) or in cash. The shares route is messy and Towry have a reputation for taking months, but that route is only for people who can't let go. Much better, tell the new provider to do it in cash. They tell Towry to sell up and forward a cheque, which they reinvest, or if it's self-select, you do.

But if you aren't putting any other money into ISAs you don't need to worry about a transfer at all. For this amount, you can just close the ISA, bank the cash, and then reinvest the lot under this year's allowance any time before next April.

Silversavers

To say that "Towry have a reputaion for taking months to transfer" is somewhat of an understatement I'm afraid. There are hundred and hindreds and hundreds of investors, previously with Edward Jones, now with Towry who have been trying to transfer away for 6, 7 months or more. It is becoming a huge disgrace in the financial services industry. You can find out more by visiting https://www.treatingcustomersshabbly.co.uk

One significant point about transfers in Joannapovey's situation is that you now have just 45 days from the date of the letter you received to find yourself a new provider (if you wish to transfer) AND notify Towry of your intentions in that time AND have your new provider put in the transfer request. Otherwise Towry will just go ahead and liquidate your funds and send you the cheque anyway.

Edwards Jones had many many clients in exactly the same situation as yourself - that is small investors who were looking to build up their portfolios for the future. Just how the FSA allowed Towry to purchase EJ when Towry are and have always been more interested in people with portfolios greater than £100K is baffling a number of peple right now.

Hope that background info helps.

jimjames

I've every sympathy with you that you invest for the long term and then the company changes their mind about what their plans are which causes you inconvenience and cost.

In most cases it is generally best to transfer the ISA within the ISA wrapper not as cash so that it protects your investment and remains tax free.

However in your case the value of the investments £4700 is well below the annual ISA limit of £10200 even including the £100pm you will be investing for the remainder of this year. As such there is much less of a case for transferring as an ISA and cash would have a similar effect.

I've just realised though that you presumably have your ISA with them for 2010/11 so would be unable to open another this tax year which complicates matters. It may be worth calling Hargreaves Lansdown and asking if they are able to assist. With their experience of transfers it may be something they can speed up.

It may also be worth speaking to the FSA about ISA rules. It seems very strange that a company can set the default option as selling up and sending cash which will lose you your ISA wrapper on those savings. They should be making it as easy as possible to transfer that ISA to another provider - in fact I'd suggest that they should be organising that if they have made the decision. I'm sure someone like HL would like to take on the extra business.

Personally I would stop the DD immediately so that no further funds are invested with them. They could well be taking either initial charges or dealing fees and if you have to sell in 1 months time then these will be completely lost.

Cautious_Investor_3

pqrdef wrote: »

You need to ponder whether we're due for a double-dip. If so, you're lined up to lose a lot more if you stay in shares. On the other hand, a double-dip creates a good chance to recover your past losses, if you get out of shares before the trouble starts and then go back in at the bottom.

A couple of points:

1. Unless I am missing something the OP doesn't say whether he is invested in the UK or overseas, clearly a double dip recession here would not have much impact on say a BRIC fund

2. Even if there was a double dip recession here and the OP is invested in the UK it doesn't follow that performance of the fund will be affected. Something slightly in excess of 50% of the profits of FTSE 100 companies are made outside the UK indeed there are a small handful of companies quoted on the FTSE who have no revenue streams in the UK. Negative performance and a double dip recession are not as correlated as people think.

The Cautious Investor

jayship

We recently transferred a small portfolio from Towry Law to HL and it was completed in less than 2/3 weeks. Part of the portfolio was sold and one fund remained invested. Hence we remained within the ISA wrapper and HL received the portfolio as cash/investment combined. Both providers operate similarly to a fund supermarket. You better call someone @ HL and discuss the options.By transfering as cash would mean that u will be out of the market for a few weeks but will have the option of starting from scratch.Remember that the choice is yours which will allow u to ponder on your next move.Should u be unable to continue investing within the ISA u can open a normal account. In April next year u can sell and buy within your next year allowance which will be 10200 pound per annum in S@S. (I think its called bed and breakfast.)

Ps. I think it is called bed and buy(NOT breakfast) Sorry.

magpiecottage

I have looked at this issue this morning. My views are:

1. Assuming the client agreement does not explicitly prevent it doing so, Towry Law will be entitled to cease acting for a customer provided it does not apply some form of discrimination that is unlawful - such as gender, race or sexual orientation.
   They are, in reality, discriminating against those holding investments of less than £100K. That is not unlawful. If you complained to the Financial Ombudsman Service on those grounds it would almost certainly be thrown out on the basis that it was a legitimate exercise of commercial judgement. In fact it puts you in no different a position to that if Edward Jones had simply shut up shop and abandoned you last year.
2. They have said that although they will not charge if you simply cash in the investments (whether taken as cash or sent as cash to another company for reinvestment) they will charge an administrative fee if you transfer "in specie" - i.e. a like for like transfer away. Given that they are, in effect forcing you to do so, I think that is unfair and that they should be expected to meet the cost involved. That is particularly so for ISAs which would lose tax advantages if you move.
   The FSA indicated concerns about the lack of this option with investment vehicles called platforms earlier this year and, although slightly different, I think it unlikely that it would not consider the same principle to apply.

Given that, I think it is unfair, my suggestion is that those affected should find a new INDEPENDENT Financial Adviser quickly then send the following template letter to Towry Law:


[Your address]

Nick Allcock
Towry Law Investment Management Limited
Towry Law House
Western Road
Bracknell
Berkshire
RG12 1TL


Dear Mr Allcock

Complaint

I have recently received notification from your company that you wish to cease acting for me in accordance with your Client Agreement.

Whilst I accept that you are entitled to do so, I would draw your attention to FSA Principle 8 which says, “A firm must manage conflicts of interest fairly, both between itself and its customers and between a customer and another client.”

Given that it is Towry Law that has chosen to terminate the arrangement, I consider it UNFAIR that you now wish to charge me to move my investments rather than encash them. Rather, I think you should meet all costs I reasonably incur in moving them.

Therefore unless you are willing to confirm that you will do so to me by the end of the working day following receipt of this letter (which I shall deem to be two working days after I post it) you must refer it to your Complaints Procedure.

Please note that my new Independent Financial Adviser is:

[Name and address of new IFA]

Please accept this letter as authority to exchange information with them and co-operate with them fully to ensure a smooth transfer of the business.

Yours sincerely


[Name]


don't worry about recorded delivery but do get proof of posting.

Microeconomics

Magpie Cottage

You are incorrect about Towry and sub £100,000 clients. The letter was issued to clients with less than £5,000 invested. In addition, Edward Jones always carried a transfer out charge as part of their terms and conditions.