Personal investment plan. Good plan?

MrMattyP

Hi

I'm a forum newbie. I can't find a related article or thread. So apologies if this is a repeat of something already covered.

I recently came into a bit of money and was looking to put it somewhere to earn good interest. I went to my bank for advice. After some umming and arring I went with their advice, which was to spread about 30% over an ISA and a few other accounts, and put approx 70% in a "Personal Investment plan" (& an investment ISA). In a nutshell, the latter means that they pass the money on to be invested in a number of areas a FTSE fund, and some others.

Now, I'm feeling a bit daft, as I kind of got swept up in it all, and didn't really get out there and find out more about what I'm investing in. I can pull out at any point within so many working days, so I'm not totally freakin' out. But I'm a bit concerned.

So does anyone have any advice on the "product" I've bought into? Or perhaps you could point me in the direction of some reading material that might bring me up to speed. A friend of mine suggested "The Naked Trader" by Robbie Burns. Good choice?

Thanks

MP

tom188

No because you have named neither the underlying products or the provider.

However the general consensus is that you should never ever go to a bank for investment advice, just like you would not go to your mechanic for advice on a new house.

dunstonh

Give us provider name, fund names and the product names (if different). Then we can rip it it shreds

MrMattyP

Hey,

Sorry. Like I said, newbie. It's from the Halifax. They call it a "Personal Investment Plan". About 40% goes into the FTSE (not the FTSE100, but 700ish), and another is called a Pelican fund(holding 30%, I think), there are two other funds with lesser amounts (don't have all details to hand as am at work). But the ones I haven't mentioned form the lesser part and are low risk, and the whole thing is UK based. Hope that's enough and not too vague. I will add more detail when I get home.

So where would be the better place to get advice? And why are banks so bad when they are traditionally the place people go to with their money? (Really concerned I'm sounding naive here!)

Very grateful for your input!

Thanks

MP

EdInvestor

Oh no, not another one


http://forums.moneysavingexpert.com/showthread.html?t=410380

and

http://forums.moneysavingexpert.com/showthread.html?t=411094

dunstonh

So where would be the better place to get advice?

independent financial advisers are the only independent and whole of market source of financial advice.

And why are banks so bad when they are traditionally the place people go to with their money? (Really concerned I'm sounding naive here!)

Banks sell their own product range (or have a link to a provider or panel of providers). The charges on these are much higher than whole of market (even the same product). The staff advising have sales targets and are generally low skilled. Banks are the training ground for advisers nowadays. You start in a bank and move on from there. You staff tend to get brainwashed into thinking what they offer is good and as they dont have access whole of market, they dont realise how poor the products. If you are any good, you wouldnt work for a bank.

dancingfairy

Advisors in banks can't give as good advice as they can only sell you the product the company's they are linked to offer - therefore you are only choosing from a limited selection and the options are a lot, lot less and there is a lot less flexibility.
Firstly if you are a taxpayer have you used up you cash ISA allowance for next year?
You also need to make sure you have access to between 3-6 months money for emergencys.
Have you paid off all your debts except the mortgage (if you have one?)
Are you looking to save (no risk of loosing capital-except you might loose out due to inflation) or invest (ie some risk?).
Hope this helps somewhat? People here can give you some general advice about what things you need to consider and what things you might want to look at and where to look for advice and then you can go into a discussion much more clued up about what you want and what the risks/benefits associated with it is.

MrMattyP

Hey

EdInvestor - Thanks for the links, interesting reading. Lots to take in. Gotta say, some of it went over my head. What's the best way to learn the basics and pick up on the jargon? Was the book I mentioned any good?

Dunstonh - You reckon my best bet is finding an IFA (learning the lingo!). Where would I look? Should I go to the FSA? Would they put me on to one, or do they have their own? (It feels like my ignorance knows no bounds where this topic is concerned).

Dancingfairy - Yes I have put 3K into a cash ISA and 4K into an ISA investor (with the Halifax) which i believe covers my allowance for tax year '06 - '07.

Yes, about 25-30% is in normal savings and current accounts with instant access, to cover emergencies.

No debt, no mortgage.

I am mainly looking to save, but am prepared to accept a little risk. The money is approx 45k and is an inheritance. I feel I have a responsiblity not to lose it, but I realise that putting in normal savings accounts wont give me the same kind of return.

I got the impression that the bank advisor was treating me like a mushroom (keeping me in the dark and feeding me on s*!t). I was given very little information, and it was obvioulsy all designed to make the product look good.
I'd really like to know the best way to get informed, and the best place to go for advice (other than to your good selves!).

Thanks again

MP

cheerfulcat

Psst, MP; look here. Start with the Fool School.

dunstonh

You reckon my best bet is finding an IFA (learning the lingo!). Where would I look?

www.unbiased.co.uk is the UK database for IFAs. You can postcode search (but dont filter anything else is that is flawed). That should give you a number of local IFAs.

Alternatively, you can read up on the subject and teach yourself.

hould I go to the FSA? Would they put me on to one, or do they have their own? (It feels like my ignorance knows no bounds where this topic is concerned).

The FSA is the regulator. In simple terms it is the Government. They will not put you in touch with an adviser and will not give any advice. Indeed, the FSA are often criticised for their lack of guidence.

whambamboo

MrMattyP wrote: »

Hi

I'm a forum newbie. I can't find a related article or thread. So apologies if this is a repeat of something already covered.

I recently came into a bit of money and was looking to put it somewhere to earn good interest. I went to my bank for advice. After some umming and arring I went with their advice, which was to spread about 30% over an ISA and a few other accounts, and put approx 70% in a "Personal Investment plan" (& an investment ISA). In a nutshell, the latter means that they pass the money on to be invested in a number of areas a FTSE fund, and some others.

Now, I'm feeling a bit daft, as I kind of got swept up in it all, and didn't really get out there and find out more about what I'm investing in. I can pull out at any point within so many working days, so I'm not totally freakin' out. But I'm a bit concerned.

So does anyone have any advice on the "product" I've bought into? Or perhaps you could point me in the direction of some reading material that might bring me up to speed. A friend of mine suggested "The Naked Trader" by Robbie Burns. Good choice?

Thanks

MP

How much money have you put in?

You appear to have bought a Personal Investment Plan for Growth

The features are here:

http://www.bosinvestment.co.uk/pages/pdfs-pip/$file/pipkfd.pdf

I think you've been sold Halifax PIP Portfolio Medium.

This has
* 40% FTSE All-Share Index Tracker (life) (http://www.trustnet.co.uk/life/funds/?fund=561)
* 30% Pelican (Life) (http://www.trustnet.co.uk/pen/funds/?fund=557)
* 15% High Income (life) (http://www.trustnet.co.uk/life/funds/?fund=550)
* 15% Gilt & Fixed Interest (life) (http://www.trustnet.co.uk/life/funds/?fund=549)
http://www.insightinvestment.com/documents/halifax/pip3.pdf

I'm not sure if there are any catches with the product itself, but the funds don't look too sharp. With the possible exception of the gilts, all of the funds in the portfolio consistently underperform comparable life funds. Which is bad, considering that life funds typically won't perform as well as unit trusts.

So they've sold you a dog, one that, on the basis of the past, is likely to leave you considerably poorer than had you been sold better investments.

Cancel now.