query with profits bonds

Cat29_2

I presume I am in the right place.
I am clearing my deceased mother's estate and have come across two with profits bonds. One of these has an advice sheet which states a gauranteed
return of £23,490 over 5 years yet the policy stattement shows the sum assured and death value as £22,863. I am not grabbing for money but I feel my mother would be put out by this and I wondered if there was a good reason for this difference as this is an area of which I have no knowledge. This policy is with Barclays and I felt I should find out a little more before I contacted them.
Equally perturbing is the fact that the other policy with Legal and General for half the investment of the above policy, over the same period of time (5 years) has accrued roughly the same amount of interest.
Any comments greatly appreciated

dunstonh

One of these has an advice sheet which states a gauranteed
return of £23,490 over 5 years yet the policy stattement shows the sum assured and death value as £22,863.

Does it actually use the word guaranteed or is it a projection or example figure? Has it done the five years?

It is very rare to see the word guaranteed used on products that dont have a guarantee. You say Barclays were the advising firm. Are you sure it's with profits? Barclays dont have a with profits fund. They did stop using Barclays life some years back and used Legal & General but with investments, they typically used unit linked funds or their guaranteed equity bonds and not with profits.

If a guaranteed equity bond is the product, then you would expect to see the word guaranteed used.

Equally perturbing is the fact that the other policy with Legal and General for half the investment of the above policy, over the same period of time (5 years) has accrued roughly the same amount of interest.

Investments like this dont pay interest. Plus she would have invested at the tail end of the stockmarket crash so it would have gone down before it went up. However, given the doubts about what type of products you are referring to it is hard to make any judgement.

We need to know more about the plans.

Cat29_2

dunstonh
I see your points.
The Barclays policy is a Barclays Guaranteed Growth Bond due to mature at the end of July. Would this explain the shortfall as the sum assured on the
illustration is only the amount of the initial investment. It states the gauranteed return if the investment remains for the full five years.
The Legal and General policy is a With Profits Growth Bond with annual bonuses.
Both investments were made in 2002.
Hope this makes it clearer for you

dunstonh

The Barclays investment isnt a with profits bond. It sounds like a guaranteed equity bond. Banks love that investment. However, they are awful once you look at the bones of it. It also explains the mix between barclays and L&G as the GEBs were branded under Barclays name but the insurance product branded under L&G.

L&G with profits isnt the best option but the capital was secure.

You cannot complain about investment returns (well, you can complain but it wont be upheld on that basis and the FOS wont overule on that basis).

Cat29_2

dunstonh
Thanks very much for your help.
Maybe I could delay the claim just to get the extra £600 for the estate.
Next problem would be what to reinvest in. Certainly Barclays got my mother to take out that plan and certainly it was not a good thing.
I think I'll take more interest in this site.

dunstonh

What grounds would you have to complain though?

Barclays would have discussed it with your mother. That fact they sold it to her isnt something you can complain about. It needs to be bad advice and it would be hard to prove that as you were not party to the transaction.

Clue for the future is never get the banks to give you advice.