HSBC FTSE100 Guaranteed Tracker

dunstonh

The second "flavour" is 100% of the FTSE but just with a minimum return guarantee added.

lipidicman

I got the info, thanks - the second flavour appears to be 24% or 50% of the FTSE rise! So I think I like the higher risk of the 130% return on the FTSE

So I am an experienced saver but I am out of my depth here. I guess I cant go into the Woolwich and ask for one of these accounts (unless they have advisors there?). I appreciate your offer, but I dont know you from Adam, so that makes me a little nervous. What would taking up your offer involve, would I send you a cheque (v.nervous about that!)

On the benefits of the account. I think it might be a good relatively risk free punt on the FTSE and a good way to use my stocks and shares ISA which I wont use otherwise. Its not 'income taxed' or a 'minicash' ISA like so many others. I realise I miss out on dividends

If I leave it on deposit I get 5.35% or 4.28% net
over 6 years that is 28.6%, so i need the FTSE to rise by 22% over 6 years to match this. This seems pretty likely to me from current levels.

I should add that I have my cash ISA for this year done, and next years lined up. I have at least a few months salray as emergency savings and a pot to pay off my 0% credit card when it runs out. I wont need this money for the 6 years (except maybe for a house, but even then I wont NEED it, it just might help reduce the mortgage)

Anyone like to add their two pence? encourage me? talk some sense into me?
(see the account terms in dunstonh's posts above)

dunstonh

I got the info, thanks - the second flavour appears to be 24% or 50% of the FTSE rise! So I think I like the higher risk of the 130% return on the FTSE

Yes, second version gives minimum return of your capital plus 24% whereas the other has a minimum return of just your capital. However, version 1 will give 130% whereas the second version is 100% of the FTSE.

So I am an experienced saver but I am out of my depth here. I guess I cant go into the Woolwich and ask for one of these accounts (unless they have advisors there?).

I couldnt find the product on the woolwich website. It is located on the IFA woolwich IFA website though.

I appreciate your offer, but I dont know you from Adam, so that makes me a little nervous. What would taking up your offer involve, would I send you a cheque (v.nervous about that!)

I understand that. However, before you did anything I would supply you my details (indeed, they were in the email i sent you as that is a compliance requirement) and you can verify those on the FSA website. I also belong to a network and you can verify my details on their website and I am also in the yellow pages (and on yell website). You never write the cheque payable to the IFA. You always write it to the company. There are still a minority of companies that are authorised to handle client money but I would be wary of using them myself. It would be similar to using any of the other discount brokers you see mentioned on this website from time to time.

The commission cannot be rebated within the product or not taken to enhance terms (as i mentioned before). So, once the product is set up and the commission paid to me, I would write you a cheque for your share.

If you can get another IFA local to you to do it on the same terms, then do it with them if you feel more comfortable. Hopefully, the information you can verify would be sufficient. I cant tell if woolwich offer the product from their website but you could always ring them. However, you would not get a commission rebate from them.

lipidicman

Dunstonh: Thanks for the quick response

dunstonh wrote:

Yes, second version gives minimum return of your capital plus 24% whereas the other has a minimum return of just your capital. However, version 1 will give 130% whereas the second version is 100% of the FTSE.

from the pdf you sent me:

Investment Returns: At the end of six years, the Plan is designed to give you:
100% capital repayment
PLUS the higher of either: 24% return
or: 50% of any FTSE 100 growth

I am reassured by the procedure you describe. This would be my first time dealing with an IFA. Would a local IFA offer me a similar share of the cashback and not charge? My guess would be no. Can I just go and see an IFA and say 'I want this', is that how it would work? I will have a look and see if I can verify you later I am very suspicious (not of you specifically, just generally!)

To everyone else: I ask again if anyone has any opinions on this as an investment. Usually I hate these things as they are minicash/attract income tax if not in an isa. But this seems better, any comments?

yorkshire_ria

The Barclays one isn't on the website because they need a signed application so you can't apply online. If you have more than £3k/£7k to invest, the best bit with this one is that as it is subject to CGT, gains will be tax free (as long as you haven't used your CGT allowance in the year it matures). You can apply once putting 2 lots into an ISA at the mo-using this & next years allowance after 5 April.

You can get information & an application by ringing Barclays Financial Planning on 0800 4046156. If you prefer to get an explanation face to face, you can book an appointment in branch with a Savings & Investment Specialist (in about 300ish branches across the country) by ringing 0845 7660839. Both numbers are open Monday to Friday 9-5. Just give them your postcode & they'll telll you the location of the nearest.

Hope you find this useful.

dunstonh

Surely Barclays would be marketing the Legal & General Product as they are tied to L&G (at least for the time being)?

lipidicman

Aren't barclays and the woolwich tied too?

dunstonh

Woolwich is owned by Barclays but Barclays currently are tied to Legal & General for the sale of regulated financial services products. It was announced in the last few weeks that Barclays are ending their single tie with L&G to go multi-tied with the new forthcoming depolorisation rules.

I just checked the Barclays website and it confirms they are tied for pension, life and unit trusts to L&G. Their compliance message says they do have "open invest" which is a woolwich product. The open invest product though, according to the website, offers L&G funds only though so this is how they probably get round it.

I have just sent a message to the woolwich IFA support to ask them if the product is available through woolwich and/or Barclays. I will post back when they respond.

lipidicman

Brilliant - thanks!

dunstonh

Got the email response from Woolwich. The plans are IFA only and not available through the branch network. Barclays have a different product range.

This does match other providers attached to banks. Scottish Widows, Scottish Mutual, Scottish Provident, L&G and Clerical Medical all have IFA only products or offer enhancements over the products offered to tied agents.