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

jem16

EdInvestor wrote: »

What is so depressing about all this is that the most important aspect of the whole process - what the money is invested in - is almost completely ignored. All that is discussed is the wrapper.

An initial free meeting with an IFA is not going to get into the nitty-gritty of exactly what funds would be used. Whoosh seems to be at the stage of sounding out a few IFAs.

The next stage would be to discuss the exact funds, the where and the how. As Dunstonh said you could still walk away at this point if you don't like what you hear.

Wurz's problem is entirely different and came about by going to a bank for advice.

EdInvestor

None of it inspires confidence, does it?

And yet, it's not really all that hard to get this sorted if you understand a few basic principles such as

#asset allocation (don't put all your eggs in one basket, divide up your funds, have some money in shares, some in cash, some in property) ,
#charges (always seek discounts especially of initial charges via discount brokers),
#tax (understand how the rules work and you can forget about most of these frightful wrappers which are full of hidden traps for the unwary)

You only have to learn about this once and it doesn't take long as millions have already discovered.A little bit of effort can go a really long way in this area.

Wurz

Thanks for the advice, about talking to a "real investments advisor" but in the short term should I cut my losses and run? All the "hold on and see" advice from Lloyds/SW's has just meant losing thousands more whilst waiting their next reply. Is this what I can complain about? or have they managed to dangle me on a string knowing full well that they have me hamstrung? This is what I meant about "poor service", they took my £100k and then cast me adrift. I wonder if I can write/email any media sources such as MoneyMail to advertise such poor service? and if I cannot claim for "poor performance" via the Financial Ombudsman could I claim for "poor service" and ask that I receive back what my investment was worth before all the delays in replying to my queries?
On another note, and whilst I still have some cash left, If I took the hit, made up the difference back to a round figure of £100k and looked for another monthly income, where would one start...obviously from comments received, not from a bank!
As for it being possible that I'm not suited to investing, all I wanted, and still do, was a monthly income from my £100k until I reached 65 (in 5 years time) and then look at whatever I could do with the investment for my retirement years. Lloyds/Scottish Widows came up with the current disaster, or, is the investement likely to recoup over the next couple of years where I could withdraw penalty free?

jem16

EdInvestor wrote: »

None of it inspires confidence, does it?

It doesn't inspire confidence in me in a bank, no. However I would never go to a bank for investment advice. A bank is good for my savings accounts - nothing more. What I am hearing about Whoosh's IFA does ,however, inspire confidence.

And yet, it's not really all that hard to get this sorted if you understand a few basic principles such as

#asset allocation (don't put all your eggs in one basket, divide up your funds, have some money in shares, some in cash, some in property) ,

Still a lot of funds to choose from. Choose wrongly and it can cost a lot.

#charges (always seek discounts especially of initial charges via discount brokers),

It's not only discount brokers who provide discounts ( i.e. IFAs not providing advice ) but full advice IFAs. Do what Whoosh is doing and sound out a few.

#tax (understand how the rules work and you can forget about most of these frightful wrappers which are full of hidden traps for the unwary)

You have already demonstrated in other posts that you don't understand tax, especially within those "frightful wrappers" that you keep condemning.

You only have to learn about this once and it doesn't take long as millions have already discovered.A little bit of effort can go a really long way in this area.

And as millions have already discovered, a little bit of effort goes a long way to losing you lots of money.

dunstonh

None of it inspires confidence, does it?

Actually it does. The IFA dealing with Woosh seems to be very fair with the terms and commission.

Its only Wurz tied agent thats a problem and thats nothing to do with the product but the quality of advice. It highlights the difference between tied advice and independent. What is more worrying is that the FSA with its retail distribution review wants advice to be even more simplistic from the banks.

#tax (understand how the rules work and you can forget about most of these frightful wrappers which are full of hidden traps for the unwary)

What about the time you told that poster not to use the investment bond recommended by the IFA because the IFA would earn a commission from it. This is despite the investment bond saving upto £200k in inheritance tax which could not be achieved on any other tax wrapper?

Thanks for the advice, about talking to a "real investments advisor" but in the short term should I cut my losses and run?

No. The product is not wrong. The funds within it are. The funds can be switched at no cost. So, why pay a £3000 penalty when you dont need to.

All the "hold on and see" advice from Lloyds/SW's has just meant losing thousands more whilst waiting their next reply. Is this what I can complain about?

No. You need to be aware that there are differences in IFAs and tied agents. The Lloyds adviser is not allowed to switch your money about. IFAs can.

This is what I meant about "poor service", they took my £100k and then cast me adrift.

Yes. That is normal for tied advice.

I wonder if I can write/email any media sources such as MoneyMail to advertise such poor service?

You could but it is unlikely to get anywhere as they have done nothing wrong. They have acted within their remit.

You want something that tied agents are not able to give. IFAs can give you that but you didnt use one. The salesforce model is very much sell the product and move on to the next person. It appears that you want reviews and servicing and you are not going to get that from a tied agent/bank.

On another note, and whilst I still have some cash left, If I took the hit, made up the difference back to a round figure of £100k and looked for another monthly income, where would one start...obviously from comments received, not from a bank!

There is some merit in that approach. If you saw an NMA IFA charging 1% plus 0.5% p.a. (0.5% natural commission and not incremental) then you could see 108% allocation on the NU bond mentioned. £8000 put on your balance over night. That covers the £3k and gives you £5k back. Although, if you are really cautious, then Clerical Medical may be better. Their charges are similar to NU and whilst medium risk or higher investors wouldnt want Clerical Medica, they are good very the very low risk investor. However, it still needs the investment selection chosen for you.

Lloyds/Scottish Widows came up with the current disaster, or, is the investement likely to recoup over the next couple of years where I could withdraw penalty free?

100% in one fund is a problem. The fund you have is unlikely to recoup its money.

To be honest, you need a decent IFA who can help you understand investing more. There will be periods of ups and downs but its knowing how you will be effected, why its happened and knowing whether its going to recover. Understanding these things makes it a whole lot easier. You dont have to know everything but you need to know more than you do. Its not difficult and a good adviser can explain it to you in simple terms.

Wurz

Must say I've learned more in the past day on this site than months of corresponding with Lloyds & SW's. Special thanks for the explanations from dunstonh, and if I might be permitted another question, what's a NMA IFA, and, living in the Colchester area, where would I look for such an advisor? I will also keep this thread up-to-date with any progress. Now if only Lloyds & SW's had said a year ago about using an IFA, I'd be thousands better off!

jem16

An NMA IFA is a New Model Adviser IFA.

Typically the NMA IFA uses a low initial commission, typically around 1% regardless of type of investment. Any extra commission paid to the adviser would be rebated back into your investment.

Their business is sustained by the use of a trail (annual) commission of 0.5%. So the better your investment does, the more they are paid so it's in their best interests to make your investment do well.

As to finding such an adviser you would need to look at www.unbiased.co.uk for an IFA in your area. Avoid large salesforces (often using 0870 numbers) and look for local smaller firms where you can deal with the owner/partner. Then phone around and ask for their charges to see if you can get one quoting the above commission.

Now if only Lloyds & SW's had said a year ago about using an IFA, I'd be thousands better off!

You would but it would never happen as Lloyds wanted all the commission paid from SW to themselves!

EdInvestor

Wurz

What other funds can you choose from apart from the SW Fixed Interest fund? The choices should be listed in that pile of documents you got from them when you signed up.

The basic problem is the way the money is invested.You need to rearrange it.This shouldn't cost you anything.So before paying any penalties or getting involved in any more high cost upfront bonds, let's see if you can do a bit of damage control with what you've got now.

Dig out the list and post up the funds here.

It may be they are all pretty second rate, but if there are some decent choices then the position can be improved at least.

[Of course I would not receommend you move to another bond, but it's worth seeing if you can avoid penalties to get out of the one you are already in.]

BTW do you have an ISA invested in unit trusts or shares?If not and if it wasn't mentioned to you by the Lloyds salesman, then that's an indicator of a missale assuming you are a basic rate (or less) taxpayer.

dunstonh

I'm sorry Ed but you do nothing on these threads but create confusion by posting inaccurate information.

i.e:

So before paying any penalties or getting involved in any more high cost upfront bonds,

There were no initial charges on the Scot Widows bond and the annual management charge would be reasonable (cheaper than unit trusts). This has been posted so many times but you continue to ignore it.

It may be they are all pretty second rate, but if there are some decent choices then the position can be improved at least.

Yes, all those invesco perpetual, gartmore, jupiter funds etc are all pretty second rate.

[Of course I would not receommend you move to another bond, but it's worth seeing if you can avoid penalties to get out of the one you are already in.]

Of course you cant because you are not FSA authorised. However, I am and it is a possible action that could result in Wurz in recovering some of the money lost as well as provide funds suitable to the risk profile of Wurz. It is certainly an option that needs to be considered.

EdInvestor

Yes, all those invesco perpetual, gartmore, jupiter funds etc are all pretty second rate.

Ah.So the SW bond does have some respectable choices.In that case why the hell are you suggesting that Wurz move to another bond if he can just switch to decent funds within the one he already has? :mad:

No wonder the FSA (and the lifecos) are desperate to do something about the advisors, the situation is just hopeless.