RBS Investment Advice

TimeServed

Due to a redundancy payment and pension lump sum, have now got 110k in my RBS savings account. RBS contacted me for a finance review to “help me get the best out of my money”. For starters they have advised me to put 25k into product called Portfolio with profit fund which is managed by Aviva, this fund can also incorporate my ISA allowance. Also 25k into a RBS 6 year index bond, this is linked to the FTSE 100 index and S & P 500 index. The rest they suggest investing in different bonds of varying time scales i.e. 1yr 2yr & 3yr.They recommended these as I didn’t want to take too much risk with my money. I would appreciate any feedback.

stringer_bell

From experience, don't do it. I'm sure a lot of others will agree on here, banks are not in it to make you money, they are in for themselves. Their product range is appalling and they are expensive, their advisers are based on commission. Once you invest too, they give you no ongoing support

I think this is right so far, someone correct me if I'm wrong

If I was you, I'd stick it in a 3pc instant access savings account until you figure out what you want to do

dunstonh

RBS contacted me for a finance review to “help me get the best out of my money”.

Which is something RBS cannot do. Their remit is a limited range of products. Not whole of market. The chance of the best being available through them is tiny.

For starters they have advised me to put 25k into product called Portfolio with profit fund which is managed by Aviva

This has mis-sale written all over it.

this fund can also incorporate my ISA allowance.

The with profits fund is not available in the ISA. So, either you are being lied to or you are mistaken. My fear here is that he is saying put £25k into the portfolio bond and nothing into ISA.

Also 25k into a RBS 6 year index bond, this is linked to the FTSE 100 index and S & P 500 index.

This is a structured product.

Which sounds like it breaks the guide the FSA issued whereby you should not put more than 25% in structured products and no more than 10% with any one market counterparty (the latter breaching that guide). The guide was not a mandatory but it was one that has been accepted as gospel by most independents. Banks dont have to follow that guide because they can only sell their own products or a limited panel. So, they have no choice but to increase the risks to you by breaching that guide.

I would appreciate any feedback.

We dont have access to your details and cannot really comment accurately. However, there are some things that stand out that put me on guard.

1 - the portfolio bond is a life assurance tax wrapper. Typically priced for large investments (£100k plus) and suited to higher rate taxpayers who will be basic rate in future (they can avoid higher rate tax this way) or those wanting a trust arrangement. You haven't mentioned trust and your investment is small. RBS take maximum commission of over 7% on Aviva bonds. Unit Trusts would be closer to 3%. I fear commission bias is in work here.

2 - With Profits fund is an obsolete method of investing. Whilst Aviva are one of only two that really have a viable with profits fund nowadays, it is really a niche offering that is only suitable to a limited number of people. That could be you but more likely it is not.

3 - The life assurance bond is not an ISA. So, you need to verify where the ISA allowance is being used.

4 - Structured products - as mentioned you are going through the 10% with any one market counterparty. Not a breach as you are using a bank so you should expect that as you are limiting your options. However, if the FSA say its a bad thing, then you shouldnt do it.

You should see a local IFA and go on fee basis. It will be cheaper than what you are paying RBS and the advice will be from the whole of market and looking at what you have got, it would be better.

TimeServed

Thanks for the very quick response and advice, seems I've got a lot of thinking to do .I will probably see an IFA

opinions4u

See an IFA.

Not a bank.

dunstonh

TimeServed wrote: »

Thanks for the very quick response and advice, seems I've got a lot of thinking to do .I will probably see an IFA

It shouldnt be a case of probably. The advice from RBS looks basic and in some cases could actually be bad advice. You are paying £2625 for that advice with RBS. An IFA will be cheaper (unless you pick one that focuses on the high net worth end which is priced for £1mill portfolios!).

crittertog

Just to second what dunstonh said - go and see an IFA.

If you decide not to, then for the cash portion of your savings, have a look around at other providers of cash accounts, and you might be able to get a considerably better deal, as well as spreading your money around so you're better covered by the FSCS (£85k per person per institution/group limit) - Martin has a "best buy" stickied at the top of the page for easy-access accounts, and there should be a bonds "best buy" article, as well as one defining the institution groups under the FSCS. Moneyfacts.co.uk has "best buy" tables for most account types, as well as a search feature.

Hopefully that should give you a good starting point ...