Foresters Friendly.....?

Devon_Sailor

Hello all,

Just a quick one. Wife has just opened a S&S ISA with these chaps via Quidco to get the £75 cashback on offer. Must admit I hadn't come across them before despite their age.

The cash is invested in their "Order Insurance With Profits Fund" - cant find any performance info on this...any good? They do seem to charge a lot in fees (2%) but there is a possibility of also getting annual and termination bonus. Putting in a £900 lump and then £50p/m so already with the cashback money (which we intend to reinvest) she is already a bit ahead of a cash isa??

Any thoughts appreciated....if its a dead duck she is still within the 30 day cancellation period....! lol

regards and thanks,

DS

opinions4u

Would you invest in a with profits endowment with high charges and unspectacular historical returns?

I wouldn't.

dunstonh

cant find any performance info on this...any good?

largely an obsolete investment with probably only one or two companies nowadays offering that type of fund as a viable option (this isnt one of the two). The bonus rate hasnt got above 3% since the 2008 and is currently 2%. Dire.

They do seem to charge a lot in fees (2%)

A lot for a fund that has only been returning 2% bonus rate in recent times.

Never buy investments on the basis of special offers. The £75 quidco cashback may entice you now but over the years, you will lose far more than that.

I wouldnt go near it.

Devon_Sailor

Thanks Dunston & O4U.

The plan would only be to keep it in for a year ebfore moving to something more competitive - she stuck her money in a cash account last year and made a princely £16 on it, so thought this way she would end up ahead even if only with FF for a year?

DS

bowlhead99

Devon_Sailor wrote: »

Wife has just opened a S&S ISA with these chaps via Quidco to get the £75 cashback on offer.

Putting in a £900 lump and then £50p/m

so already with the cashback money (which we intend to reinvest) she is already a bit ahead of a cash isa??

If she has paid in £825 (net of quidco return) and is committing to another £50 each month, and doesn't know what she'll get back, you (or she) can't possibly say that she is a bit ahead of a cash isa.

cant find any performance info on this...any good?

As dunstonh has said, it doesn't seem so. See http://www.forestersfriendlysociety.co.uk/saving-investing/isa/product-performance/
Has your wife really committed to investing over £1000 this year and another £50pm to get £75 cash without any concern for what the £1000+ might turn into?

1) if they charge you 2% per year turning every £100 into 98 and then pay you a 'bonus' of 2% on your £98 taking it back up to £99.96, you are not getting a great return.

2) the headline amount in your account may go up from time to time (due to better bonuses) but if the underlying performance of the investment is poor they will not be able to pay you out that amount. See the explanation of "market value reduction" on their FAQ.

If you are still within the cooling off period, I'd suggest you take the comments of the other posters here on board as an ice pack. You should find you cool rapidly and cancel. The £75 is nice but spread over, say, a 5 year investment it is only £15 a year - which is not very much by the time you've been invested 5 years and have paid in £4000.

*edit* - I see you've updated to say she was only planning on doing it for a year. This maximises the cashback per year, but unfortunately it is not nearly long enough to hold an 'investment' ISA whose market value may fluctuate over time. Even if it was one with an expectation of going up well in the long term, which this isn't really anyway...