Norwich Union Portfolio Step-down: any good for income for a 63-yr-old?

dunstonh

This is a real joke. The money in the fund automatically gets charged CGT.So you have "no further liability" because you've already been automatically charged CGT.

What capital gains tax is payable on dividends, gilts or corporate bonds?

I'm afraid that the example quited by Munk is much more tyoical of a standard investment bond than what Dunston h says.Remeber that hardly any advisors follow the so called "new model" with allegedly lower charges.

Even on maximum commission, the bond quoted on this thread can return a reduction in yield over 10 years of between 1 and 1.5%.

But what would the value be? You are still better off with 60k than you are with nothing. :rolleyes:

How do you calculate £60k as being better than £100k plus growth? SInce when has £100k been nothing?

Care annuities are very cheap - they are the only annuities which are IMHO value for money.

Care annuities are expensive if you are in good health.

Whereas typically a care annuity will cost around 50k, guarantee the payment of fees for life and enable 100k to be passed on to the family.

If you have put £50k in the annuity then you only have £50k left over from the hundred.

Pity so many advisors prefer to flog people investment bonds for care fees rather than care annuities.No doubt the latter don't pay high enough commission.

Most common reason is retention of capital. Many people want the money to be retained and dont want to purchase the annuity. If a sufficient income can be generated from the investments then they are more inclined to keep them rather than kiss goodbye to the money in an annuity.

Flynn_2

dunstonh wrote: »

I do get people messaging me to do business and I will do it if they ask. However, it accounts for less than 2% of my turnover...

You get 2% of your business here? Is that 2% of a very small turnover or 2% of a large turnover? If you're running a decent sized business that's a fair bit of money for no outlay.

Of course you promote your business here. I don't come here much but know your fee-structure and your claim of how superior your service is to other advisors. It's like a broken record at times. I've also seen your dismissal of any investments that would generate little or no annual repeat commission, 'trail' commision, for your fee structure.

Particularly unattractive is the bullying, towards both men and women, and even defamation of anyone who challenges your claims. This was what you said about one person in this thread:

dunstonh wrote: »

You don't like it when people seek advice and you will do anything to put them off. Even if it means telling lies.

To publicly call someone a liar is a serious defamation and should be immediately withdrawn. To have made such a remark doesn't do you any credit.

munk

Why are you so against IBs EdInvestor? I can appreciate that in the worse case scenarios (unfortunately my mum's own case with a scott wid flex opt bond is an example of this), a bad IB investment can perform badly. But surely in the best case scenario you can't deny they have their merit *when selected carefully with independent advice*- for example for those wanting to avoid IHT, higher rate tax earners, local auth means testing mitigation etc.

As to the issue of dunstonh posting so much on the forums and his motives for doing so - the opinions I've heard him express on here have only gone to help me form my own judgment about the possible options available and I know others feel the same way.

edit - esp in relation to the post above: Generally all this back biting only goes to make this place less useful for the target audience - those with limited knowledge of investment issues.

EdInvestor wrote:

It doesn't sound to me as though your mother is the type of lady who would want to be at the mercy of the penny pinching LA

Yes that's true, but right now she's in good health and ]aying into a pension of the kind you suggested I feel is perhaps not the best thing here. Thanks for the headsup on the idea though, will read more about it.

jem16

Flynn wrote: »

You get 2% of your business here? Is that 2% of a very small turnover or 2% of a large turnover? If you're running a decent sized business that's a fair bit of money for no outlay.

Of course you promote your business here. I don't come here much but know your fee-structure and your claim of how superior your service is to other advisors. It's like a broken record at times. I've also seen your dismissal of any investments that would generate little or no annual repeat commission, 'trail' commision, for your fee structure.

Particularly unattractive is the bullying, towards both men and women, and even defamation of anyone who challenges your claims. This was what you said about one person in this thread:

To publicly call someone a liar is a serious defamation and should be immediately withdrawn. To have made such a remark doesn't do you any credit.

The words "pot", "kettle" and "black" spring to mind when reading your post.

Perhaps you need to read this thread again;

http://forums.moneysavingexpert.com/showthread.html?t=362375

At least 4 people described your comments towards Dunstonh as "very rude and uncalled for".

Flynn_2

munk wrote: »

But surely in the best case scenario you can't deny they have their merit *when selected carefully with independent advice

That really is the difficulty Munk, getting truely independent and unbiassed advice.

Agents like Dunston generally get paid commission by the fund managers to sell their products. Usually that will be an upfront fee that may be rebated either wholly or in part plus an ongoing 0.5% each year.

When you get independent medical advice from your GP does he get a back-hander from the drug company as long as he keeps prescribing their pills to you? Not if he's independent and honest.

Don't underestimate the value of that 0.5% which goes to the advisor based on your fund whether it goes up or down. If you invest 100K and break even the agent gets an extra £500 commission for that year. If your funds lose 5% he still gets an extra £475 commision for that year.

If your fund goes up by 5% but inflation is 4% you only gain 1% but the agent still makes his 0.5% - that's half as much as you have earned from your money. He gets that 0.5% of your fund every year which even if you do no better than keep up with inflation is a huge chunk of your money over the years.

There are of course many investments that don't pay commission to IFAs including most direct investments which is probably why an "independent advisor" is less likely to recommend that route. The ones they prefer are the managed investments that charge high enough management fees to pay them an ongoing commission.

The important thing is to be aware of how they get their money, who pays it to them and why, and why they may be biassed against any investment that doesn't pay them a yearly commission.

Flynn_2

jem16 wrote: »

The words "pot", "kettle" and "black" spring to mind when reading your post.

There is a legal difference between rudeness to salesmen and defamation Jem. Especially when describing someone's opinion as "lies" and not very pleasant when a man picks on a woman to do so.

Your sycophancy gets a bit wearing at times.

jem16 wrote:

EdInvestor and Dunstonh hold very different views but manage to conduct their "differences of opinion" in a civil manner.

Calling someone a liar is may be your idea of civility but not mine I'm afraid.

jem16

munk wrote: »

Why are you so against IBs EdInvestor? I can appreciate that in the worse case scenarios (unfortunately my mum's own case with a scott wid flex opt bond is an example of this), a bad IB investment can perform badly. But surely in the best case scenario you can't deny they have their merit *when selected carefully with independent advice*- for example for those wanting to avoid IHT, higher rate tax earners, local auth means testing mitigation etc.

I agree totally on this. I have a NU Investment Bond - the main reasons at the moment are that I am a higher rate taxpayer and wish to lower IHT as much as possible.

As to the issue of dunstonh posting so much on the forums and his motives for doing so - the opinions I've heard him express on here have only gone to help me form my own judgment about the possible options available and I know others feel the same way.

Totally agree. We need to hear from both sides in order to make a judgement.

jem16

Flynn wrote: »

There is a legal difference between rudeness to salesmen and defamation Jem.

Flynn wrote:

When you get independent medical advice from your GP does he get a back-hander from the drug company as long as he keeps prescribing their pills to you? Not if he's independent and honest.

Well I'm glad you know the difference.

Your sycophancy gets a bit wearing at times.

I'll always defend someone I feel is being unfairly treated.

dunstonh

Of course you promote your business here. I don't come here much but know your fee-structure and your claim of how superior your service is to other advisors.

Evidence to support those lies?

I have not promoted my business. I have "promoted" the NMA business model and I have been critical of the transactional business model and salesforces. And rightfully so. Salesforces do more to damage the reputation of financial services than any other distribution model.

My posts encourage people to negotiate the remuneration and aim for 1.8% (the FSA average) rather than pay the full commission.

I've also seen your dismissal of any investments that would generate little or no annual repeat commission, 'trail' commision, for your fee structure.

The only investments which do not pay commission which I generally dismiss are premium bonds and I give my reasons. A position supported by a good number of the regulars here. What about the commission paying products that I also dismiss as well, such as GEBs? Of course, acknowledging that I dismiss commission paying products as well doesnt fit with your attack.

There are of course many investments that don't pay commission to IFAs including most direct investments which is probably why an "independent advisor" is less likely to recommend that route. The ones they prefer are the managed investments that charge high enough management fees to pay them an ongoing commission.

Direct investments, like shares and most investment trusts are outside the scope of authorisation for most IFAs. IFAs can recommend packaged products.

To publicly call someone a liar is a serious defamation and should be immediately withdrawn. To have made such a remark doesn't do you any credit.

Its not defamation when the evidence proves it. I have a lot of respect for Ed and her comments but when it comes to investment bonds she has this blind spot and she repeats information that has been shown to be inaccurate a number of times before.

munk

Flynn wrote: »

That really is the difficulty Munk, getting truely independent and unbiassed advice.

Agents like Dunston generally get paid commission by the fund managers to sell their products. Usually that will be an upfront fee that may be rebated either wholly or in part plus an ongoing 0.5% each year.

Yes but the point here is that dunstonh hasn't touted directly for business, hasn't said 'I advise you to invest in xyz product' - your insinuation is that he's going to make money from somehow merely mentioning products on this forum which obviously won't be the case unless a reader decides to contact him and actually pursue the product via him. From what I've read so far I don't think that would be such a bad thing tbh

Personally I feel that generally he's given a decent unbiased opinion of what options are available and the arguments seem to erupt mainly due to his disagreements with EdInvestor in which he's clearly passionate! Whilst EdInvestor provides a well thought out, calculated and intelligent response on these forums, generally it appears to be the case that the response are irrationally negative towards a certain type of product - IB bonds. Whether this is a result of a bad experience in the past I don't know, but unfortunately it doesn't help those who are already uncertain of the facts to start with when someone tars all IB products with the same brush.

Don't underestimate the value of that 0.5% which goes to the advisor based on your fund whether it goes up or down. If you invest 100K and break even the agent gets an extra £500 commission for that year. If your funds lose 5% he still gets an extra £475 commision for that year.

Of course you speak of the worst case scenario here; when compared to going via 'tied agents' or going direct with a provider, the figures you mention above are more the norm than the worst case.

I suppose these kind of comments are inevitable on a forum targeted at people who have likely in the past been burnt by IFAs. I know myself I'm quite reluctant to go with an IFA after bad experiences (actually a bad experience with a tied agent, but it's had the effect of putting me off all IFAs).

Posting negative posts like you do here against IFAs can only make things worse - persuading people that IFAs are *generally* a bad thing and that they should instead just go and invest via the tied agents or direct with the provider. Doing that they're only bound to end up paying excessively in ICs and AMCs.

There are of course many investments that don't pay commission to IFAs including most direct investments which is probably why an "independent advisor" is less likely to recommend that route. The ones they prefer are the managed investments that charge high enough management fees to pay them an ongoing commission.

Well here you seem to be advising exactly exactly that, to go direct to the provider and pay the full non-discounted 5.5% IC + non-rebated 1.5% AMC on something like a UT which is exactly what people should be dissuaded from doing. Instead they should be thinking of using an IFA (or going DIY via a discount broker) and reaping the benefits of reduced IC (5.5% down to 0-0.5%) and discounted trail commission on the provider's AMC (1.5% down to 1%?).

The important thing is to be aware of how they get their money, who pays it to them and why, and why they may be biassed against any investment that doesn't pay them a yearly commission.

This is actually a very good point - it's important to find an IFA that isn't motivated purely by commissions that aren't performance related.

I don't understand why above you recommend people go direct to a provider to get their investment product when they're much more likely to be ripped off by high initial charges and non-rebated amcs?!