Help A Son Trying To Help His Dad!

Singh87_2

Hey Everyone...
As you can see from my post count, I'm quite new to moneysavingexpert, so bear with me!
My dad had around £107k to invest in his building society account, which payed him something in the region of 2.75% interest, which as you can see is quite rubbish. I had been telling him to move it to get a better return and he finally has!!
We decided to invest £70k, and keep £37k in case of emergencies. We got 3 £7k ISA's (My dad, my mum and myself ), which left £49k. The woolwich adviser, where my dad's money originally was, advised us that the £49k would be good in a FTSE-100 product, where if the FTSE-100 stays where it is now or increases, we get a 18% return over 3 years. However, if the FTSE-100 goes down, we still get our full capital back, which is good, as my dad wanted a no risk product.

Now, for your help.... do you think the above products are 'ok' to invest £70k in? And more importantly now, my dad has now decided that he would like to invest a further £20k, but he's kind of left it up to me to decide where. He's agreed that he doesn't mind taking risk with this £20k in hope for a better return. I've been thinking about funds in emerging markets or something? Can anyone suggest any funds or any other products?

Forgive me, if I am asking alot from you guys, and if my post was too long! I just want to do the best I can with my dad's money!! Thank you in advance.

chesky369

Be very wary of the Woolwich advisor - they only recommend their own products, so they're hardly working in your dad's interest, just the Woolwich's. With this sum of money it would probably best to go to an IFA who would be working for you, not some bank or building society.

Chadsman

What is his/your attitude to risk? Do you have a mortgage that can be (partially) paid off? Have you put some in a pension?
I would not touch with a barge pole any 'advisor' from any bank/bs. In my experience they are only interested in getting you to sign on the dotted line so they get lots of commission for themselves without worrying about minor details such as are you getting a product that is right for you.

meanmachine_2

Where was this Woolwich "advisor" when your dad's money was earning a pittance in one of their pathetic accounts?

Don't reward them by buying one of their crappy products.

As others have suggested, investigate paying off the mortgage first, if applicable.

CLAPTON

firstly open the best instant access saving a/c you can find and move all that money for a 2.5% a/c while you are thinking about thinks

second: you say you have /are opening 3 x 7k ISAs... what are you actually investing in though (the ISA is only a rapper)

third the 'safe ' product recommended by woolwich offers 18% over 3 years max (i.e. about 5.7% per annum) and maybe nothing? sounds awful.. better in a B Soc a/c at least you're guaranteed some interest and you can get more than 5.7% .

dunstonh

The woolwich adviser, where my dad's money originally was, advised us that the £49k would be good in a FTSE-100 product, where if the FTSE-100 stays where it is now or increases, we get a 18% return over 3 years. However, if the FTSE-100 goes down, we still get our full capital back, which is good, as my dad wanted a no risk product.

Oh dear. Woolwich tied agent and financial advice are not things that really go together. The product they have recommended is awful. Not bad advice as it is compliant with their rules but the product is dire.

He's agreed that he doesn't mind taking risk with this £20k in hope for a better return. I've been thinking about funds in emerging markets or something? Can anyone suggest any funds or any other products?

On the one hand he wants a guarantee and now emerging markets are being considered. They are at opposite extremes. Forcing a capital guarantee on a chunk and then going top end risk scale with the rest is not logical. A wider portfolio including investments from all sectors which averages out to his risk profile is far more logical and far more likely to give better returns over the long run.

I fear that if you keep the FTSE GEBs and go emerging markets that you (or your father) will end up very disappointed.

cheerfulcat

Singh87 wrote: »

Now, for your help.... do you think the above products are 'ok' to invest £70k in? And more importantly now, my dad has now decided that he would like to invest a further £20k, but he's kind of left it up to me to decide where. He's agreed that he doesn't mind taking risk with this £20k in hope for a better return. I've been thinking about funds in emerging markets or something? Can anyone suggest any funds or any other products?

Hi, Singh87,

Normally I am a keen advocate of the DIY investment route. But as your father seemingly takes no interest in matters financial, I would strongly advise him to see an investment professional, either an IFA or a financial planner - dh and Chrismaths may be able to point you in the right direction but in the meantime look at unbiased.

As to the Woolwich product, a) it's a bit rubbish and b) you don't really want to put all that money in the one place.

Ian_W

Agree totally with what's been said about bank advisers and their products - generally best avoided and as CLAPTON says, why take the risk with the FTSE if you can get 6% pretty much guaranteed with most savings accounts?

Singh87 wrote:

He's agreed that he doesn't mind taking risk with this £20k in hope for a better return. I've been thinking about funds in emerging markets or something?

Blimey! Talk about going from the shallow end where your feet can touch to jumping in at the deep end with concrete boots on!! - to quote an IFA poster on another thread.
The biggest emerging market - China - fell about 6/7% overnight and is looking distinctly volatile at the mo. You can take a lot more measured risks for a higher potential reward than deposit accounts without taking megga risks by spreading your investments about. With the amount involved you may be better using an IFA in the first instance then learning about investments as you go along.

greenface

meanmachine wrote: »

Where was this Woolwich "advisor" when your dad's money was earning a pittance in one of their pathetic accounts?

Don't reward them by buying one of their crappy products.

As others have suggested, investigate paying off the mortgage first, if applicable.

:T QUOTE OF THE WEEK :T AND POSSIBLY A GOOD QUESTION TO ASK THEM

Singh87_2

Oh my god, I never expected such high quality posts and advice in such a short amount of time! So, first of all, thank you guys!!

Meanmachine, you are absoutely right. Where was this adviser when we were getting such a rubbish return on our money!

As to the questions posed in your posts:

My dad's attitude to risk is very cautious. Basically, he would like the majority of the money safe, as in no risk to the capital. However, like I said, he wouldn't mind putting around £20k in some sort of 'risker' product, where he will be getting a handsome return if things went our way.

Also, we are currently living in a house which is mortgage-free, and he doesn't have any other loans/debts to pay off. So, he doesn't mind putting it away for a few years, but would like to keep say £15-£20k incase of an emergency.

Clapton asked about what kind of ISA's they are. They are also FTSE-100 related, in which after 5 years we get 120% of what the FTSE-100 has risen. Again, this is capital protected, but we may not get a return on our money.

Thanks for the link cheerfulcat. I wouldn't mind going to an IFA, but I think my dad might be a bit wary of them if they are charging some sort of management fee, charges et cetera. Is there any other alternatives you guys suggest? Once again, although it's a bit contradictive, my dad wants around £70k to be safe but generate a good return, he woudln't mind putting £20k into a risker product, but it must have the ability to produce decent returns, and he wants the rest of the odd £15k to be there incase of emergencies. Also, if it makes a difference he has just turned 71!

Cheers guys!

dancingfairy

For that amount of money I would go to a financial adviser - and not one associated with a bank as they can only give advice on their own (limited) range of products which may not be the best.

Also as mentioned might be best to make sure they have a decent pension provision sorted out and also investigate whether it makes sense to pay off the mortgage. Without knowing the ins and outs- their attitude to risk, how long they want to invest for, etc it is really quite hard to advise.

With 49k you should be able to invest in a spread of funds that match your risk profile and not have all your eggs in one basket (so to speak). Perhaps a small part of it could be in emerging markets- but this is a very risky area and should only make up a very small part of your investment - i've heard about 5%- 10% of your investment max should be in these areas.

What exactly did you invest in in the ISA- what funds did you go for?
Get the money in a high interest account while you think what to do with it all- you don't want to rush into anything and it can earn you interest while you research the best course of action.

All the best - you obviously have a very trusting family to be asking your advice on where to invest.
P.S I'm not a finacial adviser and this is all things I've picked up from here so don't take my word for it - you need to do your own research and also see and IFA.