AXA/Sunlife With Profits Bond

ambert

EdInvestor wrote:

Is there an anniversary date (typically after 5 or 10 years) when you can cash it in without penalty? If there isn't I would suggest you cash it in BUT, wait for a little while to see if the MVA gets removed in the current bonus round - other insurers are doing this. Should become clear over the next few weeks.

It's a terribly bad idea to move the money from one bond to another one though.These products have the highest charges in the market and they are particularly extortionate for small sums.

Check it out here:

https://www.fsa.gov.uk/tables

In addition, within the bond you are paying tax on income and capital gains which you would not pay (assuming you are a basic rate taxpayer) outside.

I would suggest you move the money to a discount broker such as https://www.h-l.co.uk and invest it in a selection of funds with charges rebated.

You could try telling your IFA you're going to do this and asking if he can match H-L's terms.

That would involve him rebating the fund initial charges ( typically 5%) and also rebating 0.25% off the annual fee, typically 1.5%.

Watch him spit with rage.

Thanks for the advice.

The bond was taken out in July 2001. Are MVAs recalculated each anniversary?
I had a look at H & L website. Which funds are you talking about, HL Multimanager or Discount Fund Supermarket or both?

EdInvestor

The bond was taken out in July 2001. Are MVAs recalculated each anniversary?

No they are supposed to reflect market conditions.At WP funds with a decent amount in equities, they have been coming down, because stockmarkets have done well.By contrast those WP funds mainly in bonds will not likely see reductions because the bond market has done badly.They might even see rises.:(

I had a look at H & L website. Which funds are you talking about, HL Multimanager or Discount Fund Supermarket or both?

You want the ISA. The annual maxi ISA allowance is 7k, so you can fill up this years and next year's (from April) over the next few months (assuming you haven't used your cash ISA allowance this year).That will get almost all the money protected more or less immediately.:)The rest you can invest direct in the fund supermarket.

Then it's a question of deciding what funds you would like to invest in inside the ISA. Step one here is usually to consider what level of risk you are happy to take -high, medium, low nil.

With profits investors were usually classified as low-medium.

defender_of_the_weak

Ambert
Did you receive any advice in connection with starting this bond. is this your only investment or part of a larger sum/portfolio?

ambert

defender_of_the_weak wrote:

Ambert
Did you receive any advice in connection with starting this bond. is this your only investment or part of a larger sum/portfolio?

I was advised by AXA advisor at the time to take out this bond as he thought there was going to be a stock market crash/downturn, which did occur as it was only a few months before 9/11. Markets now seem to have recovered the losses. The same guy reckons there's going to be another dive soon, can he be right again???
But he did say at the time that the return I would be getting from the bond would a lot higher than I actually got.
I don't have a portfolio as such, I have a few savings accounts with banks/building societies with fairly good interest rates, certainly better than I'm getting with the ASL bond at the moment.
I also have a mini-cash ISA that I've put money into this year. Should I take the money from the bond and reinvest £4k in another mini-ISA of equities as EdInvestor suggested earlier in this thread?

dunstonh

I was advised by AXA advisor at the time to take out this bond as he thought there was going to be a stock market crash/downturn, which did occur as it was only a few months before 9/11. Markets now seem to have recovered the losses

I know a number of AXA advisers who introduce business to me for stuff they cant do. Not one of them has much skill or knowledge and DOTW could crucify them with their investment recommendations.

The same guy reckons there's going to be another dive soon, can he be right again???

Maybe, maybe not. There is no person who can tell you when these things are going to happen.

But he did say at the time that the return I would be getting from the bond would a lot higher than I actually got.

He stuck you in a bond that was linked to the stockmarket for a great chunk of it. If he was "predicting" a crash, why did he choose that fund?

If he took you out of stockmarket funds then he has almost certainly cost you money. If you had invested in the stockmarket just before the crash an choose a spread of funds and only got sector average returns you would be over 50% up by now. It would have gone down and then back up again. The fund he chose was disgraceful when he was presenting it as a fund to be in if it crashes.

If what you say is correct, then you should be looking to complain.

defender_of_the_weak

If he was predicting a cash why did he not tell you to sit on the money and wait and then hit the market at the bottom, or close to it. After allowing for the initial crash and dead cat bounce you could have invested in the FTSE when it was in the 3500 mark and then seen the rise in value up to today.

If he is predicting another correction this sounds like he is getting ready to move your bond out the door and replace it with a new investment.