New - Investec FTSE 100 Enhanced Kick-Out Plan 31

Reaper

dunstonh wrote: »

Remember the counterparty risk is vital with structured products. There is no FSCS protection on these. If the counterparty goes under so does all your money.

The structured products with the weaker counterparties tend to have better terms than those with stronger counterparties. So, do not focus on the positive terms without considering the risks you are taking.

Also if you remember in the other thread I pointed out Investec are only rated BBB by Fitch which is only just above junk grade and considerably worse than the UK banks.

The terms of this policy are very attractive particularly if you get the commission free version, but there is a fair amount of risk too.

Porcupine

The key with these is do to sufficient reading between the lines. Back in 2007/8 the issue of counterparty risk wasn't well publicised, and the prospectuses trumpeted the security of some irrelevant bank (eg the administration authority) while completely failing to mention the identity of the counterparty or what the underlying investment was.

I note that they fail to mention the investment again. The UK5 option looks interesting as far as reducing counterparty risk, so I'm wondering what the pitfalls might be. For example, they talk about leaving collateral at the big-5 banks but don't say what it is. What if that collateral was shares, for example? Worst case, what if it was Investec shares? Market trouble, Investec goes under, the collateral shares are suddenly worth much less than the face value yesterday.

Or am I being too cynical?

darren72

Looks like Cavendish is going to be the cheapest way of taking this one out.

Thanks

wensleydale

darren72 wrote: »

Looks like Cavendish is going to be the cheapest way of taking this one out.

Thanks

When I've looked into this before I think Moneyworld were best up to an investment of about £7.5k then Cavendish became cheaper.

darren72

wensleydale wrote: »

When I've looked into this before I think Moneyworld were best up to an investment of about £7.5k then Cavendish became cheaper.

Thanks - That is great, I will have a think about it.

Have you gone for this ??

Thanks

wensleydale

darren72 wrote: »

Thanks - That is great, I will have a think about it.

Have you gone for this ??

Thanks

I've split my investments across different plans and also invested at different times of year so my average "size" is £5k, therefore I use Moneyworld.

Having said that the next ones to mature (assuming they do this year) will be approaching the £7.5k level so I will switch to Cavendish if this works out cheaper.

josholi99

Hi all, I have been reading posts and just wanted to confirm suggestions to minimise costs when considering non commission option. Is the reference to Cavendish Financial LPP (found website?). and am I right in concluding they will carry out advisor role for £35?
Am new to this option so any commentary appreciated!!!

dunstonh

and am I right in concluding they will carry out advisor role for £35?

No. Cavendish will allow you to buy the product via them but it will not be on advice basis and you will not get the consumer protections that advice offers. It is generally known as execution only.

The site is http://www.cavendishonline.co.uk/

Am new to this option so any commentary appreciated!!!

Be wary of the risks of the product you are buying on a non-advice basis. It fails our due diligence. However, you may decide the risks are acceptable to you.

Reaper

josholi99 wrote: »

Is the reference to Cavendish Financial LPP (found website?). and am I right in concluding they will carry out advisor role for £35?

No - the website you need is Cavendish Online:
https://cavendishonline.co.uk/investments/guaranteed-bonds/

And no - as Dunstonh says this is not an advisor role. They are "execution only" which means you are turning down the option of advise and making your own decision. Cavendish will supply you with the product because you are effectively "self certifying" that it is suitable for you.

I use execution only brokers, but they are only suitable if you are confident you fully understand the product, the risks, and the suitability. You will gain or lose money without anybody to compensate you if it all goes pear shaped.

josholi99

Thanks for the comments! re advice from an FA, does this afford the client some protection? and focusing on this type of product I'm aware of Walkers Crips and now Investec - are there more companies worth a look?