More Than Investment Bond

mandyjpd

Just a warning to other savers and investers. I've just had a 'guaranteed' investment Bond come in from More Than Savings and Investments. Get this, they have had £15,000 of my money for 5 years, and guess what return I got on it - ABSOLUTELY NOTHING! They sent a really condescending covering letter too, saying 'they had pleasure in returning my bond' - what I don't get was that it was linked to the FTSE 100 - I've got an ad from the Daily Mail on Saturday saying it was at a 6 year high! I'm going to complain to the Financial Ombudsman, but they say I've got to complain to More Than first, which I am doing. Just be careful other savers, if it's linked to the FTSE be wary! The only people who make money and get rich with the FTSE are the fund managers!

Mr_Mumble

The FTSE-100 is at a six year high. There was a steep drop in the FTSE-100 during 2002 but this has been more than made up for over the following four years. This url gives you the FTSE-100 over the last 5 years:
http://ichart.europe.yahoo.com/c/5y/_/_ftse

The reason why you've only returned the initial sum seems to be that this was a particularly awful type of guaranteed equity bond product. Can't find specifics on the 2002 issue but for a similar 2003 product from More Than:
http://www.honestmoneynow.co.uk/productshame.html#morethan

The url says it all really

"the market has to return in excess of 18% per annum for six years before the annual return on the equity portion of this bond exceeds 4% "

These types of products are usually scolded on the MSE forums but the vast majority would still have given you some kind of return along with the capital sum. A woeful product, sorry.

Chrismaths

I'm going to complain to the Financial Ombudsman, but they say I've got to complain to More Than first, which I am doing

What's the basis of your complaint? That you didn't read the information on the product? Sure, this was a rubbish product, but the only person you have redress to is yourself.

As Mr Mumble says, if you'd invested in a FTSE 100 tracker, you'd have returned 30.2%. If you'd invested in an All share tracker, you'd have returned 48.3%. Don't blame the stockmarket. Just make sure you understand what you are buying next time, and don't buy any financial product because of an advertisement!!

dunstonh

You have no grounds for complaint.

You chose the product, you didnt seek advice. So, you cannot blame anyone other than yourself.

The product has done exactly what it said it would. The fact is is rubbish and tracks one of the worst performing stockmarket indicies in the world is not a claimable event.

I've got an ad from the Daily Mail on Saturday saying it was at a 6 year high!

What is at a 6 year high? You have to be in it to get it. You dont get your advice from the Daily Mail do you?

Did you know that the FOS get more complaints from Daily Mail readers than any other newspaper?

Mr_Mumble

dunstonh wrote: »

What is at a 6 year high? You have to be in it to get it. You dont get your advice from the Daily Mail do you?

Did you know that the FOS get more complaints from Daily Mail readers than any other newspaper?

Dunstonh, the OP was just pointing out that they'd read an ad in the Mail that the FTSE-100 is at a 6 year high, it is at a six year high!

The Daily Mail is only beaten in circulation by The Sun and has a far stronger emphasis on personal finance than Murdoch's tabloid. You can hardly expect the broadsheets with less than a third of the circulation to trump the Mail for complaints.

RayWolfe

dunstonh wrote: »

Did you know that the FOS get more complaints from Daily Mail readers than any other newspaper?

Of course they do! One has to be really unhappy to buy the Mail and one will be suicidal after reading it. ;-)

jamesd

mandyjpd, "Average the 24 FTSE100 values occurring at the end of each of the 24 quarters making up the 6-year period, to give something called the Mean Value. Calculate the percentage increase of this Mean Value over the opening value of the FTSE100 Index. Take 50% of the result, and that's your equity bonus".

Sadly that means that only 1/24 of the current value is a factor and worse, you had while half of the time it was below and this method of calculating means that those times outweigh the current higher value.

It's a particularly terrible product, worse even than the usual guaranteed equity bond.

If you'd like to do better I suggest that you investigate putting the 15,000 in a range of unit trusts selected to achieve your desired risk level. You're almost certainly going to do better, though if you watch the average values during the years you may be down for the first few years if the market drops during them.

If you aren't sure where to start, look at UK equity income, corporate bonds and property funds that hold real property (look for building street addresses in their list of holdings). A mixture of those is unlikely to be lower after five years and is likely to do substantially better than a GEB.