Aviva portfolio investment Bond

dunstonh

The bond is the Aviva with - profit s4.

That is one of the 150 funds available. Its largely obsolete nowadays.

What else do you need to know to form a judgement on it .

1 - What made you pick this tax wrapper when you have the 2011/12 ISA allowance available in just a week (and you can use unwrapped funds for the rest)?

2 - what made you pick Aviva when it is no longer near the top end for pricing on new business?

3 - what made you pick a fund that is a niche fund and for most people unsuitable?

mailman1962

Hi , Was told this was a good fund for me by the adviser at my local Nat West Bank, seems like Iv,e taken some bad advice, is it too late to get out, and get my full money back, only signed up for it lastweek . I have other money available to top up my ISA when the time comes. Thanks

dunstonh

Was told this was a good fund for me by the adviser at my local Nat West Bank,seems like Iv,e taken some bad advice

Basically, any IFA could get it classed as a mis-sale. Wrong tax wrapper and not holding back for next years ISA with rest going in OEIC would be main reasons. This is an example of a commission biased sale. Natwest sales reps get paid more for doing investment bonds than they do ISAs and OEICs. Even if you have the money for the next ISA, then the tax efficiency differences between bond and OEIC in your case would suit OEIC.

is it too late to get out

If you are in the cancellation period its fine.

mike88

A bank is the worst place to receive financial advice as they are tied to an individual company's products. You get a better deal from an independent financial advisor who is able to offer products from a wide range of providers. Of course you get en even better deal by going through a discount broker which for unit trusts in an ISA avoids the need to pay initial charges which can account for up to 5% of the purchase price. One advantage of a stocks and shares ISA in a unit trust is that you can gain access to your money at any time without penalty.

As you are a novice you might of course benefit from advice so the independent route would be far better than a Bank.

Finally I'm appalled that Banks are still pushing with profits bonds. Everything I said in my previous posts about Market Value Adjusters where you are penalised for gaining access to your money even if the fund incurs losses and financial penalties for early encashment is true. As previously stated a With Profit Bond - even in a dubious tax wrapper - is a poor investment compared to other more tax efficient options. Get out while you can.

dunstonh

Finally I'm appalled that Banks are still pushing with profits bonds.

My Aviva rep has said that the overselling of the bonds by banks is causing them problems with complaints.

As previously stated a With Profit Bond - even in a dubious tax wrapper

It is with profits FUND not with profits BOND.

mike88

dunstonh wrote: »

It is with profits FUND not with profits BOND.

It is a Portfolio Step Down Bond with a With Profits Fund as its component element.

dunstonh

mike88 wrote: »

It is a Portfolio Step Down Bond with a With Profits Fund as its component element.

Its an investment bond with around 300 unit linked funds. Two of the funds you can choose to include are unitised With Profits funds. The others are conventional unit linked funds.

A With Profits bond is one which only offers a With Profits fund.

This was the point I was making. Just because you had the with profits fund, doesnt make the product bad. You could have had any of the other funds available.

If you go use the HL ISA and end up with the worst fund on the whole platform, does that make the HL ISA bad? No, the fund is but not the provider or product.

mike88

mailman1962 wrote: »

Hi, can anybody advise me if i,m doing the right thing investing in an aviva portfolio step down bond,

mailman1962 wrote: »

The bond is the Aviva with - profit s4. The policy is divided into a number of policies, referred to as segments/clusters.

These statements imply there was only one fund divided into segments but at the end of the day it doesn't matter as the OP is proposing to cancel.

dunstonh

at the end of the day it doesn't matter as the OP is proposing to cancel.

We certainly agree on that point. We are just playing with the wording and what part is the issue

mailman1962

Thanks to both of you for the advice, lesson learned, will be more careful in future, policy now cancelled. Suppose next question is , after topping up the ISA, whats best to do with the rest of the cash ?