theiaccount - promising 40% above FTSE and HPI over 10 years...

Cannon_Fodder

theiaccount is a SIPP that guarantees to outperform any stock market and house price rises, has 100% capital security and no fund management charges...a £35 fee per year, seems to be the only charge.

see http://www.theiaccount.com/index.htm

current Interest offer http://www.theiaccount.com/webpages/current_rates.html

examples of possible theiccount performance, compared to FTSE and HPI average, best and worst is shown at http://www.theiaccount.com/webpages/interest.html

reads well in terms of comparable charges http://www.theiaccount.com/webpages/comparing_charges.html

The major possible downside appears to be Inflation - should we see 10 years of flat/negative FTSE and HPI, you just get your money back...

Opinions??
Upside/downside??

tom188

Looks like a fairly typical rubbish GEB type product to me.

I certainly wouldnt look at it.

dunstonh

tom, you beat me too it.

The charges are implicit and not explicit so comparing the two is not like for like. If you are wondering what other charges there is then think about the 3% p.a. average dividends on the FTSE companies. You dont get that 3% p.a. with this product. So, by them keeping it, is that their fee?

Its smoke and mirrors with these type of products. They have some very good sound bites and can be made to look extremely attractive to a inexperienced investor. However, the negative is mostly no dividends/income.

To give you an idea, 10k invested 10 years ago in a FTSE100 tracker vs the FTSE100 (with no dividends)

Tracker: £19071
Index: £15405

The difference is the income and where is that going?

God forbid that anyone would invest their stockmarket chunk all in a FTSE tracker anyway.

Primrose

I wouldn't touch any GEB related product with a bargepole again after investing in a Bristol & West TOISA which produced precisely zilch during its five year term. OK, so I haven't lost my capital but would have done better putting the money in a high rate straightforward building society savings account. Seems to me that these products have so many restrictions and "Ifs and Buts" about them that they're not transparent and you can never really check from day to day how they're performing.

Cannon_Fodder

Thanks for the opinions.

My maths is weak so please bear with me - when comparing Pensions V ISA, comments have been made about ignoring "cumulative tax relief" benefits of the Pension, because being taxed at the end makes it the same as an ISA.....which makes sense...

So does the "40% above" for this product, act like that in reverse?? Is it so bad not to get 3% dividends each year if you get topped up by 40% at the end...???

Or put another way, is an ISA like this GEB, in that you don't get the tax relief the same way as you don't get the dividend, but better than the ISA you get +40% at the end with this product???

Albeit +40% of a weak choice of fund...and I can see the 10 year period being a risk, rather than the flexibility of other products, as you're likely by virtue of Murphy's Law to hit a crash at calculation time!

Not suggesting as a single basket for all eggs, you'd need a spread of other fund types (see, I have been paying attention!)... Or even convinced myself at all, to be honest, just playing devils advocate to get my head round it...but admit to being slightly intrigued, as the HPI angle seemed a cheap way into Property - although is that even more confirmation that a property crash is around the corner, as such products try to tempt us onto the bandwagon...?