Help please

Miles69

New user so advanced apologies for any faults.

100k to invest. Looking initially at low risk as have no experience. Independant financial advisor pushing ISA's, corporate funds and life insurance which pay annual interest. However, concerns about economy and therefore long term investments effects and also worried about management fees eating into any interest gained.

Married with 2 children. No other savings or pensions held at this time. Would appreciate any opinions.

cheerfulcat

Hello, Miles69,

A few questions for you first -

Is this truly an IFA, not a bank employee?

Is he or she suggesting cash or stocks and shares ISAs, or a mixture?

When you say corporate funds, do you mean corporate bond funds?

Where does the life insurance fit in? Is the IFA suggesting an investment bond?

Miles69

Yes true IFA referred to by accountant. Suggesting mixture ISA, for both my husband and I and yes and yes to latter. Sory ipad playing up!

brasso

Miles69 wrote: »

Yes true IFA referred to by accountant. Suggesting mixture ISA, for both my husband and I and yes and yes to latter. Sory ipad playing up!

Invest £10 or so in a book. I recommend the Tim Hale book (Smarter Investor). And read around the forums -- here and Motley Fool, plus others you'll find.

100K is too much to deal with hastily. Take your time. A few weeks' delay won't harm.

cheerfulcat

And is the IFA suggesting that the whole 100,000 is put into corporate bonds ( apart from the cash ISAs )?

Miles69

Yes, suggesting remaining funds aft ISAs be spread around 3 or 4 different bonds. Thanks for all comments - will do more research before i commit

bigfreddiel

cheerfulcat wrote: »

And is the IFA suggesting that the whole 100,000 is put into corporate bonds ( apart from the cash ISAs )?

presumably the ifa charged you a fee for this advice - rdr means they MUST tell you their fees up front - what was the fee?

ask him a simple qestion which is If I buy £90k worth of corporate bonds will I have £90k worth on paper in corporate bonds on day one?

ifa's will do their best to hide any fees, charges, kickbacks (no commision now so they need their chunk of your £100k) so do your best to find out what these are before you do anything.

You could find yourself 'paying' 8% or more for your ifa to dosomething you could do for nothing - thats £8,000 btw

My advice - buy Tim Hale's book, check the monevator eb for passive investing, open a s$s isa and do it yourself, tddirectinvesting, sippdeal, and so on

it is ll very simple you just need to learn a little but

good luck

fj

atush

Miles, as yo have no pension, that and Cash ISas are where you should start (while reading your book lol).

For every 8K you put into a pension, the tax man will add 2K (and give you 2K back if you pay HRTax).

So start a pension, and fiull both cash Isas for you and the OH immediately

brasso

atush wrote: »

Miles, as yo have no pension, that and Cash ISas are where you should start (while reading your book lol).

For every 8K you put into a pension, the tax man will add 2K (and give you 2K back if you pay HRTax).

So start a pension, and fiull both cash Isas for you and the OH immediately

Not everyone would agree about the pension, or the cash ISA. The pension top-up is great, but there are very strict rules about what you can do with the fund and when, which is the price you pay for getting your tax back on the deposits.

And that's essentially what it is for most people. A tax rebate, rather than a gift. With ISAs you pay tax on your salary and put what's left into an ISA, where the taxman agrees not to tax it again. With a pension, you get the tax back that you've already paid but then you pay tax on it again when you eventually start spending it.

OK, so it aint as simple as that, but just making the point that we shouldn't just tell people to put their money into a pension fund as though it was a totally common sense option, when many people would argue that it isn't.

cheerfulcat

Miles69 wrote: »

Yes, suggesting remaining funds aft ISAs be spread around 3 or 4 different bonds. Thanks for all comments - will do more research before i commit

So you are being advised to commit the whole of the £100,000 - apart from the cash ISA component - to corporate bond funds in ISAs and in an investment bond? If that is the case I would be very cautious; most people would be better off with a wider spread of investments.

The investment bond wrapper can be very expensive, as well, and unless you are higher rate taxpayers, may not be of benefit to you.

I agree with the others - have a nose round the Motley Fool site and Monevator, and perhaps have a look at Incademy for a quick ( free ) course in investment basics.

http://www.incademy.com/pages/home.htm?ginPtrCode=10002

grey_gym_sock

what was the exact wording used? ... a corporate bond is 1 thing, a corporate bond fund is another, an investment bond is something else, etc ... basically, a "bond" can mean anything