what should I do?

ok364125247

Anyone knows what is the difference between an IFA and a wealth management company???

bluewater

We were in a similar position in July 2006 and invested £500,000 with Lloyds Private banking. The portfolio was growth orientated (called progressive equity profile),

Value of the portfolio went up to £550,000 in 2007 and dividends were about £15,000 pa but then gradually the value fell and the 2008 crunch saw it plummet to £380.000. We left it alone and it has now recovered to £490,000. But the projected dividend is now around £8,000 pa. We could change the portfolio to a more income related one but quite honestly we have lost faith in the whole thing and intend to cash it all in and put the money on deposit in 3 or 4 accounts - instant, fixed for 1 year and fixed for 3 years. This might not be the strategy that financial advisers would recommend and Private Banking will try very hard to dissuade but we don't trust their motives. Since 2006 we have paid over £30,000 in fees to them.

Each year they have put the maximum into ISAS so now about £100,000 is protected from tax should any gains be made in the future. It seems a shame to abandon this ISA but the alternative is to transfer it to another fund of some kind which will immediately attract an initial fee of around £3,000 followed by 1.5% pa.

At least with the money on deposit we can sleep ant night knowing that even if we take all the interest as income we will still have £500,000

One downside of course is that we will pay 20% tax on this instead of the 10% if the income was derived from share dividends.

westy22

Anyone knows what is the difference between an IFA and a wealth management company???

About £25,000? (and not in a good way!)

ok364125247

bluewater wrote: »

We were in a similar position in July 2006 and invested £500,000 with Lloyds Private banking. The portfolio was growth orientated (called progressive equity profile),

Value of the portfolio went up to £550,000 in 2007 and dividends were about £15,000 pa but then gradually the value fell and the 2008 crunch saw it plummet to £380.000. We left it alone and it has now recovered to £490,000. But the projected dividend is now around £8,000 pa. We could change the portfolio to a more income related one but quite honestly we have lost faith in the whole thing and intend to cash it all in and put the money on deposit in 3 or 4 accounts - instant, fixed for 1 year and fixed for 3 years. This might not be the strategy that financial advisers would recommend and Private Banking will try very hard to dissuade but we don't trust their motives. Since 2006 we have paid over £30,000 in fees to them.

Each year they have put the maximum into ISAS so now about £100,000 is protected from tax should any gains be made in the future. It seems a shame to abandon this ISA but the alternative is to transfer it to another fund of some kind which will immediately attract an initial fee of around £3,000 followed by 1.5% pa.

At least with the money on deposit we can sleep ant night knowing that even if we take all the interest as income we will still have £500,000

One downside of course is that we will pay 20% tax on this instead of the 10% if the income was derived from share dividends.

Thanks for sharing this, I 'm so sorry for you as this is our biggest fear about having our hard earn money going down the drain because of always wanting more (I'm not saying that on your behalf!! but on my other half's who keeps on saying that we could get more if invested in the stock market as opposed to the 4% net from saving accounts!!!)

ok364125247

westy22 wrote: »

About £25,000? (and not in a good way!)

About £25,000! for which option???, the wealth management I would have thought????

atush

Each year they have put the maximum into ISAS so now about £100,000 is protected from tax should any gains be made in the future. It seems a shame to abandon this ISA but the alternative is to transfer it to another fund of some kind which will immediately attract an initial fee of around £3,000 followed by 1.5% pa.

Given these ISAs belong to you, I would seatrch and find one (I assume they are S&S isas) that have lower fees. I am sure you will find one that takes transfers in w/o such high fees.

It would be good to see you at least keep the tax advantages. After all, you deserve that much out of this whole thing.

AS a side not, you invested your money in 2006. Had you invested it in 2003, you would actually be well into profit, and your fund could be worth 750,000. Would you have been mor happy with the 30K fees then?

It was unfortunate that you invested near the top of the market, but as you know, no one can tell the future incl private weath advisors. But at least you didn't make the one mistake many on your situation do, and that is withdraw your funds when they hit botton (ie 380K) you left it invested and recovered some of your losses.

My father died in 1987, and my mom invested the proceeds of his life insurance in the market before that crash. Eventually, it came good but made for many a sleepless night.

westy22

About £25,000! for which option???, the wealth management I would have thought????

You guessed right! Wealth Managers and Discretionary Managers don't have 'secret weapons' and 'hidden gems' that they can access exclusively for you (although they would have you believe that they do!). A competent and qualified IFA will have access to everything that wealth managers do but, on a pre-agreed, fixed fee basis, will be able to do it for a lot less cost, both initially and for ongoing service.

westy22

It seems a shame to abandon this ISA

Why abandon it? It is your ISA, not theirs, so just re-register it or transfer it to a new manager - you can easily find a new manager that will make no initial charge and may even pay you a 'golden hello' to have £100,000 transferred to their platform.

gadgetmind

I'd go for NS&I bonds for £60kpa, S&S ISAs for 2x£10680 pa with investments into some good wealth preservation ITs/OEICS such as Personal Assest, Troy Trojan, RIT and Ruffer, and anything outside ISAs into high yield investments that pay dividends (not income!) as these are very tax efficient for basic rate tax payers.

ok364125247

Today 2011, you can get on a 5 years bond a fixed rate at 5% gross

Does anyone remember what was the rate on a similar offer before the crash of 2008?