Capital and income bonds

ChesterDog

It's hard to judge the performance without knowing what the starting figure was, Maxiboy.

bigadaj

Maxiboy wrote: »

I dropped the financial adviser (IFA and he was recomended!) when I found out he set the investment up but had not put me as the benifiiciary!!!! thats also why I dont know alot about it, I gave him the money and he invested it. There are fund names like SK Jupiter, SK aviva property and they all have 'units' with amounts. I just wanted to draw a small amount out for home improvments and at least use some of it now and keep the rest invested.

If you can provide a full list and an idea of the approximate amounts we may be able to help further.

The SK presumably stands for skandia, it might be best if you arrange to see another ifa to chat this through. It will cost some money to do so but might allow you to understand what you have and how you might access it. They are listed on unbiased.com and you need to turn off the button for sponsored ads. The first session should be free and they should detail charges fro the work you require.

wigglefish123

Well from the available information does the I?fa seem to have done a good job to you?

I can't see how you can say one way or another - based on the limited info provided. There's obviously more to the investment than meets the eye if there are beneficiaries then its probably in trust and that must of been done for a good reason..........

dunstonh

An investment bond not in trust would not have beneficiaries. An investment bond in trust would. The taxation of the trust is different to one not in trust. There are also different types of trust.

Refer back to the adviser and get them to advise you on what you have and the best way to do what you want.

gadgetmind

wigglefish123 wrote: »

you say the OP hasn't said that much and yet you're happy to lay the blame at the door of the adviser without knowing the circumstances.

It's hard to know if there is any blame, but it seems that the OP has been sold something that he doesn't understand (why wasn't it explained?) and that doesn't seem to fit his needs.

This smacks of yet another "hit and run" sale of a high fee investment bond, but I'm happy to sit back and see how things unfold.

xylophone

http://www2.skandia.co.uk/Documents/Literature%20Library/SLAC/Investment%20and%20Savings/SK6153_Capital_and_Income_Bond_KFD.pdf
OP is this what you have? If so, see p10 and 11.

dunstonh

It's hard to know if there is any blame, but it seems that the OP has been sold something that he doesn't understand (why wasn't it explained?) and that doesn't seem to fit his needs.

That is a bit of a leap. Many people forget what they were told a week ago. Let alone years or even decades. Also, if you read what the OP says, he dropped the IFA for not putting him as beneficiary. However, you dont put down a beneficiary on investment bonds that are not in trust as the owners are the beneficiaries.

So, if the adviser didnt put in trust, then its nice and straightforward. However, if the OP then placed it in trust later himself then that is not the fault of the adviser.

This smacks of yet another "hit and run" sale of a high fee investment bond, but I'm happy to sit back and see how things unfold.

Most investment bonds were not actually high fee. Some could be but that applies to all investment universes that have cheap and expensive options. The low cost was the one thing that kept them relevant pre RDR. Skandia life were the first to offer external funds in life and pension contracts. It is probably long in the tooth now compared to modern options but early in it was a market leader.

gadgetmind

dunstonh wrote: »

Most investment bonds were not actually high fee.

I've seen people discussing 8% of the pot up front, which seems high to me, but I do understand that as an investment vehicle they can be cost effective if accessed correctly.

dunstonh

gadgetmind wrote: »

I've seen people discussing 8% of the pot up front, which seems high to me, but I do understand that as an investment vehicle they can be cost effective if accessed correctly.

Yes, some had 8% as a commission. Some had 5% as a commission. However, not many actually had initial charges. This is one area where the commission system could actually favour the consumer. The commission was not taken as an explicit fee on many. It was factored into the AMC. Now, if you used internal funds, you could get under 1% a year despite a 7% commission being paid. I have seen negative reduction yields on these over 5 years (i.e. the increased allocation and subsequent charges actually resulted in the consumer getting more from the provider than they paid).

Post RDR, that is not allowed. It has reduced the cost effectiveness of bonds arranged after RDR and volumes of new recommendations has dropped significantly and we are now seeing providers starting to close their product for new business.

doughnutmachine

dunstonh wrote: »

Yes, some had 8% as a commission. Some had 5% as a commission. However, not many actually had initial charges. This is one area where the commission system could actually favour the consumer. The commission was not taken as an explicit fee on many. It was factored into the AMC. Now, if you used internal funds, you could get under 1% a year despite a 7% commission being paid. I have seen negative reduction yields on these over 5 years (i.e. the increased allocation and subsequent charges actually resulted in the consumer getting more from the provider than they paid).

Post RDR, that is not allowed. It has reduced the cost effectiveness of bonds arranged after RDR and volumes of new recommendations has dropped significantly and we are now seeing providers starting to close their product for new business.

Lol, it's posts like this that make me think you are here to defend the fund management industry!!!



You seem to suggest that products that pay 8% commission are OK if this commission is paid over a few years and not paid up front?