Looking for advice on ISA shares

laura1812

Hi

I am looking for advice on behalf of my granda. He has money invested in a ISA shares account that slowly goes up each year. My granda does not know if he should withdraw this money now (he currently does not need the money and it will just sit in bank account) or wait but if he waits he is worried that if he dies then it will be difficult for my mum and aunt to then withdraw these shares. Does anybody know what would happen in these situations? Any advice is appreciated? Is the money best left where it is or is he best to stick it in his bank account? Thanks

smartiedriver_2

If he were to sadly pass away, the funds in the investment would form part of his estate and be subject to his will, or probate if no will is made. He really should make a will to prevent the Government taking their share.

As for whether to remain invested or withdraw, he should take financial advice from a qualified advisor, it doesn't have to be an IFA. They can assess which funds the monies are invested in and then advise if he should hold or sell them, or buy more. We cannot even begin to guess at whether to keep or sell without undertaking a full financial review, understanding his entire portfolio, attitude to risk and aims for the money.

Try your (his) bank as first point of contact.

Aegis

smartiedriver wrote: »

If he were to sadly pass away, the funds in the investment would form part of his estate and be subject to his will, or probate if no will is made. He really should make a will to prevent the Government taking their share.

A will probably won't change the amount of money that goes to the government unless no surviving family can be found. It will ensure that the assets are divided up in accordance with his will, barring any disclaimers or variations to the will, including what happens to the ISA shares. As such, definitely a good idea.

As for whether to remain invested or withdraw, he should take financial advice from a qualified advisor, it doesn't have to be an IFA.

Not such a good idea. A tied or multi-tied adviser is not well equipped to carry out a portfolio review, as they only have a limited number of funds they can talk about and therefore won't necessarily know even the first thing about the other investments being held. An IFA (and NOT a bank IFA) will usually have access to a lot of research on the various funds available, therefore they will be able to review the situation a lot more easily.

They can assess which funds the monies are invested in and then advise if he should hold or sell them, or buy more. We cannot even begin to guess at whether to keep or sell without undertaking a full financial review, understanding his entire portfolio, attitude to risk and aims for the money.

True enough, however an IFA is needed unless churning into the bank's white-listed products is a desired end result.

Try your (his) bank as first point of contact.

Definitely not.

Try unbiased.co.uk to find a couple of local IFAs and see what they think. They can probably conduct a portfolio review on a fee basis without having to make a recommendation to switch simply to earn their commission.

Aegis

Just a quick edit to add that a lot of the decision making will have to be based on the size of the job. If it's a case that it's literally a single year's worth of ISA contributions, then the likelihood is that it won't be worth paying a fee to get it reviewed. If it's several years worth then it might be more worthwhile.

With regard to what will happen to the shares or funds themselves, that will depend on the executor of the estate. The assets themselves will immediately vest into the estate on grant of probate and can either be transferred in specie to a recipient or they can be sold and the proceeds can be paid out. The executor of the estate will probably make this decision in accordance with the will (if present) and the requests of the beneficiaries.

smartiedriver_2

Aegis - you seem very anti- bank advisors. Without making a generalisation, multi-tied advisors are aware of the full market, even if they can't sell from the whole of market, and bank-employed IFAs are no worse than so-called independent IFAs.... at least the bank staff get a proper salary rather than relying on commission which encourages miss-selling.

wriggly

smartiedriver wrote: »

Aegis - you seem very anti- bank advisors. Without making a generalisation, multi-tied advisors are aware of the full market, even if they can't sell from the whole of market, and bank-employed IFAs are no worse than so-called independent IFAs.... at least the bank staff get a proper salary rather than relying on commission which encourages miss-selling.

What is the point of speaking to someone who is "aware" of the full market, but can't actually sell products outside of a narrow range?

Will a bank advisor actually recommend that a customer not buy the bank's products, but to go somewhere else to buy a better product?

phil80

As mentioned above a bank adviser will not recommend a product from another provider they will only sell their banks products.

Using an IFA who has access to the whole market would be the way to go.

opinions4u

smartiedriver wrote: »

Aegis - you seem very anti- bank advisors. Without making a generalisation, multi-tied advisors are aware of the full market, even if they can't sell from the whole of market

The benefit being?

and bank-employed IFAs

Which banks employ IFAs that the customer can access easily?

are no worse than so-called independent IFAs.... at least the bank staff get a proper salary rather than relying on commission which encourages miss-selling.

Even if the IFA charges a fee and commission is rebated in to the investment?

Slightly confused by the post. I struggle to recognise the benefits of a sales driven bank financial adviser with a narrow product range with a one size fits all charging structure against the IFA who accesses the full market.

There's even one bank where IFAs can sell identical products to those sold by the bank, using the same company. The bank charges a higher fee than the IFA has to.

dunstonh

Aegis - you seem very anti- bank advisors. Without making a generalisation, multi-tied advisors are aware of the full market, even if they can't sell from the whole of market, and bank-employed IFAs are no worse than so-called independent IFAs.... at least the bank staff get a proper salary rather than relying on commission which encourages miss-selling.

multi-tied advisers are not aware of the full market. They cant be. They dont have the research software to review the whole market. They are also not allowed to give advice on products outside of the remit. Only generic or factual information. They are not dealing with the providers, products and options unavailable to them so their knowledge will be generic at best.

Bank IFAs are typically quite poor and work more from a limited panel (almost multi-tie in everything but name). HSBC, for example, recommend too many HSBC funds and products yet a independent IFA would hardly use them. People recently have posted that both Natwest and Lloyds independent arms have Natwest own brand investments and Scot Widows investments respectively included in their portfolios.

Banks have higher mis-sale rates than independents. This is despite IFAs handling the majority of advice transactions. In some areas IFAs dominate the distribution.

Even where a bank has access to a known provider (lets say Scottish Widows), they will not have access to their full range and many of the products will cost a heck of a lot more. Someone quoted Scot Widows doing life assurance at £380pm on the insurance section the other day. The same terms via an IFA were £225pm

The bottom line is that there is no reason at all to see a tied or multi-tied sales rep over an independent IFA. All salesforces should be avoided (whether independent, multi-tie or single tie). An IFA can run rings around a tied or multi-tie.

Sceptic001

wriggly wrote: »

What is the point of speaking to someone who is "aware" of the full market, but can't actually sell products outside of a narrow range?

Will a bank advisor actually recommend that a customer not buy the bank's products, but to go somewhere else to buy a better product?

It must be very dispiriting (for anyone with a conscience) to be required to sell inferior products knowing that the customer could do a lot better elsewhere, especially if the customer mistakenly believes that your advice is impartial.

dunstonh

Sceptic001 wrote: »

It must be very dispiriting (for anyone with a conscience) to be required to sell inferior products knowing that the customer could do a lot better elsewhere, especially if the customer mistakenly believes that your advice is impartial.

Bank sales reps tend to fall into a couple of camps.

1 - those that are using the bank to get trained up but then move up the career ladder once they are ready to make the jump to IFA.

2 - those that get brainwashed by their employer into thinking that they are the best option and that everything else is bad.

There are also those that prefer the comfort of not having the responsibility of being an IFA and can only handle 10-15 products or if they get a good branch where they are spoon fed customers they can earn a good whack (in bank clerk terms) without doing much work. I know a few ex IFAs who went back to tied agent as they couldnt handle being an IFA as it was too hard for them.