Investing a lump sum to generate an income

quotememiserable

accesspwd1 wrote: »

If you do decide to lend through Zopa, the amount your lending will require you to pay for a consumer credit licence that will cost in excess of £1000

Anyone know more about this? The help on the ZOPA site doesn't mention any license requirement, and says there's no maximum to the amount you can invest. Neither Funding Circle nor Thin Cats mention it on their sites, plus I don't have a CCL and I have over £20k with the latter two.

grizzly1911

jem16 wrote: »

MVRs usually only apply on with profits funds. However the tax wrapper itself can have early exit fees during the first five years.

Was your IFA planning on using with profits funds or are you mistaking that for early exit fees?

It is new advice and could well be the subject to the same initial fees. Some IFAs may well put it through as a lesser fee but there is still the same amount of work involved for additional work as for new work.

It is a with profits policy.

Any idea of the magnitude of MVRs relative to the investment?

This opportunity dropped in the IFAs lap. Helping complete a proposal and dropping it in an envelope to the "insurer" isn't that bigger task. The same effort would be required be it £10k or £100k IMO.

A lot will hang on whether the company will provide the life cover element or it would just be a capital return.

jem16

grizzly1911 wrote: »

It is a with profits policy.

Any idea of the magnitude of MVRs relative to the investment?

As far as I'm aware the MVR will depend on the market conditions. Is there also an early exit fee or not?

This opportunity dropped in the IFAs lap.

Can you clarify what you mean by that? Obviously you have approached the IFA regarding a new investment over and above existing investments. However who decided on the Investment Bond - you or the IFA?

Helping complete a proposal and dropping it in an envelope to the "insurer" isn't that bigger task.

If being done on advice basis, it's rather more than just completing a proposal.

I have recently completed a £2k increment to my pension. The research involved and the length of the suitability report that accompanied the "recommendation" was just exactly what it would be should it be a brand new pension. In other words the report had to document the need for this increment and then research why it was best to add to the existing pension as opposed to any other pension option.

I would expect that the report would have to research other available options such as ISA and unwrapped investments and then to give a cost comparison as to why the IFA feels that the Investment Bond is a suitable investment given the client's circumstances. If this is not happening I would find an alternative IFA.

The same effort would be required be it £10k or £100k IMO.

Quite likely although the liability will be much greater and will have to be costed into the fee.