We'd like to remind Forumites to please avoid political debate on the Forum. This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
Clerical Medical Investment Bond
Comments
-
we tried that 'tax wrapper' argument in our claim for misselling but apparently my OH was advised we could put the money in ISAs and he decided we wouldn't because the returns wouldn't be high enough.
Bogus answer. The same investment fund put in the two different tax wrappers would see the ISA outperform the bond. I would suggest referring it to the FOS if you are still able to do so.I've just got to decide now if the next 2 will be even worse and we're better cutting and running.
One the current issues get resolved, the period after that is "predicted" (not earlier caveat about predictions) as economies would have cut debt and be leaner going forward. However, a lot of the growth of the last generation was based on credit. Credit that is not going to be available like it was before. So, growth in future is likely to be lower over a period. The biggest problem for you is that we dont know if the recovery will be 2 years or 5 years or other period.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Was the money left by your brother to your children?0
-
thanks for your guidance, I am grateful!
we tried that 'tax wrapper' argument in our claim for misselling but apparently my OH was advised we could put the money in ISAs and he decided we wouldn't because the returns wouldn't be high enough.
At that point a decent adviser should have either declined the business altogether or insisted that you invest into ISAs first. There no excuse at all for putting £25,000 into a bond when the full ISA allowance remained available, as it would have taken less than a year to get the full amount into your combined ISAs.
If the return wouldn't be high enough in an ISA, it wouldn't have been high enough in a bond either. If the adviser didn't have access to an ISA with a decent range of investments, then they would have been obliged to refer your case to someone that did or to decline to act on your behalf at all, as FSA guidelines have stated for some time that if a tied adviser doesn't have access to an appropriate product they must not substitute an inappropriate product. As such, unless you specifically stated that you wanted to invest into funds which were disqualified from being held within an ISA (highly unlikely), recommending a bond was almost certainly a mis-sale.
Complain formally to the company whose adviser sold this bond to you on the basis that the tax wrapper adviser was totally inappropriate (20% minimum tax on all gains for an onshore bond vs 10% withholding tax on dividends and no tax on investment interest or capital gains within an ISA). If they don't give a satisfactory response, ask for their final written response and complain to the Financial Ombudsman Service. I'd be shocked if they didn't rule in favour of a customer who was sold a bond for a portfolio that could easily have been placed into an ISA.
we haven't taken anything from it and it showed a loss within 2 years and carried out showing the same sort of £4000 ish loss, give or take hundreds in the last 3.
Your point about a bad 5 years is a good one, that's why the OH was keen to invest because the previous 5 had been good. I've just got to decide now if the next 2 will be even worse and we're better cutting and running.
the point about taking a bit from both funds or closing down one fund in the bond to make a difference to our tax situation is confusing me. Apparently better if we shut down one (Managed income (ACC)) as we won't get hit with a tax bill?
I'm trying to look at it as the money wasn't 'ours' to begin with so we've lost nothing but it's hard when i emotionalise the money as it came from my brother's will for our children.
If it was paid from a will to your children, that may well have disqualified the ISA option altogether. However, in that case the assets should have been split evenly and invested via bare trusts for the children, as that would likely have generated the same income tax treatment as within ISAs and gains within their capital gains tax allowances, effectively making each portfolio as tax efficient as an ISA. The use of an investment bond would still have no justification from a tax perspective there.
Still worth complaining in this case.I don't envy you financial folk, 'cause you get people like me who can't distance themselves emotionally from their financial decisions.
Every client is emotionally tied in to decisions they make with their finances. You're certainly not alone here!
I should note briefly that the above comments are all based on my limited understanding of your position so far, so there can't be any guarantee of successfully complaining. However, the complaints process is free, so you have nothing to lose by raising such a complaint, especially with such a weak-sounding justification for selling you an investment bond.I am a Chartered Financial Planner
Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.0 -
If it is still within the 6 months since the broker turned you down you should refer it to FOS and probably see if you can get some help in making your case. The bond probably paid most commission, thats why it was recommended and I'm betting it also contributed to the poor performance. Five years is the shortest timespan for an adviser to recommend an equity investment and I would also suggest you should have been recommended to invest in a lower risk fund than Ethical and managed income but without all the details cannot say for sure.0
This discussion has been closed.
Categories
- All Categories
- 346.5K Banking & Borrowing
- 251.3K Reduce Debt & Boost Income
- 451.3K Spending & Discounts
- 238.7K Work, Benefits & Business
- 614K Mortgages, Homes & Bills
- 174.7K Life & Family
- 251.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 15.1K Coronavirus Support Boards