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

baby_boomer

jem16 wrote: »

So why would you need to do this (loads of homework) unless you have decided, on the basis of two bad experiences, that they are all not to be trusted?

This is a strange discussion, which appears to have undercurrents I don't understand.

Isn't my position clear? I just want to be able to tell the wheat from the chaff. As anyone would whose fingers had been burned in the past. Why am I being accused of having zero trust in all IFAs when I have said no such thing?

Feel free to continue the argument among yourselves, but I shan't be contributing further as my not very controversial stance remains the same.

Wurz

Just catching up with posts from my last visit and I can tell that there are a few ruffled feathers in the forum! What I am looking for is a "wealth" of experience to help my finances return to normal. If that means paying a commission or fee seems like good business. Now someone who has had the patience and tenacity to post thousands (nearly 15k in one case!) must know a lot more than me, and just one option that could add £8k (dunstonh) starts looking interesting, as does the link to "times on line". The main phrase seems to be "you need a decent IFA who can help you" Thanks to jamesd for suggestions and I'll be looking for a "decent IFA" or even an NMA, asap!

Coops10

Wurz - good for you. Possibly a place to start is www.unbiased.co.uk. You can filter a search according to your needs of IFA's in your area. Generally the first meeting is free (if not, make sure it is!), and this will give you a good gage as to how knowledgeable they are, and how much they are willing to put you first - which is obviously the most important thing!

jem16

Wurz wrote: »

Just catching up with posts from my last visit and I can tell that there are a few ruffled feathers in the forum! What I am looking for is a "wealth" of experience to help my finances return to normal. If that means paying a commission or fee seems like good business. Now someone who has had the patience and tenacity to post thousands (nearly 15k in one case!) must know a lot more than me, and just one option that could add £8k (dunstonh) starts looking interesting, as does the link to "times on line". The main phrase seems to be "you need a decent IFA who can help you" Thanks to jamesd for suggestions and I'll be looking for a "decent IFA" or even an NMA, asap!

Hope all goes well for you in your search.

whoosh

Just a note from the OP that (in response to above posters). Thanks for the thoughts, and I am indeed heartened by the fact that the IFA who recommends the NU bond seems to be thinking along the right lines, notwithstanding my ignorance of how he would proceed with asset allocation.

The debate (before it fractured somewhat) also helped me to understand more about what an NMA-approach means; and it certainly put into perspective the vague plans conveyed to my mother by IFAs whose commission rates included upfront %s of several multiples greater than the NU chap.

On the subject of fractured debate, anyone know whether the downturn in bonds referred to above is likely to have harmed my mother's Scottish Mutual with-profits (invested in 2000)? Edinvestor reckons so. I'm on tenterhooks until we can find out tomorrow.

EdInvestor

I don't think there's much point in me trying to respond to these personal attacks: suffice it perhaps to say that we are likely to see ongoing defensive behaviour from the advisor community while it is under scrutiny for questionable practices by the regulator.The FSA thinks a major shakeup of the industry is needed in order to try to restore public trust.
Another article on this in the Independent today

and a second in the Telegraph

Perhaps one could also add that advisors seem to be particularly sensitive about criticism of the investment bond product - this has been the case for some time. IBs can be one of the most profitable products in the industry, with some of the highest charges and commissions attached. They are the source of the second highest number of misselling complaints after endowments.

In a limited number of cases they may be a suitable investment. I would simply suggest that readers exercise caution if they are offered such a product and make sure they read and understand all the small print before buying.

dunstonh

I don't think there's much point in me trying to respond to these personal attacks

Says the person that has spent more time attacking other individuals on the board than anyone else.

suffice it perhaps to say that we are likely to see ongoing defensive behaviour from the advisor community while it is under scrutiny for questionable practices by the regulator.

And what model is the FSA looking at as the top level for advice? That is the NMA model. As an NMA IFA, I can quite pleased with some of the proposals. The areas I am not happy with is the downgrading of the basic advice that will be allowed. Strangely enough the articles you linked don't even cover that apart from:
2. Primary advice – providing advice on more straightforward needs, this advice could be less costly and more easily explained to the consumer

That level will have no cap on commissions. The products offered will be lower quality. The advice will be almost flow chart in method and there will be less consumer protection. It will be the main source advice for most in the country as it will be the banks that will be offering it.

Who do the new FSA proposals suit the most? The banks. Who has the worst record for financial advice? The banks.

WHo has the best record for advice? IFAs. Who will be affected most? IFAs. It will decimate the IFA population. Who will gain from this the most? The banks.

Who will lose out the most? The consumer.

Perhaps one could also add that advisors seem to be particularly sensitive about criticism of the investment bond product - this has been the case for some time. IBs can be one of the most profitable products in the industry, with some of the highest charges and commissions attached. They are the source of the second highest number of misselling complaints after endowments.

Misleading again. Of course, that is par for the course from you at times. With Profits funds have been a problem and the investment bond was the most common place for them to appear in the past. You appear to associate one particular fund with the product and has been mentioned a number of times, the tax wrapper is one thing, where you invest is another.

Perhaps your failure to recognise that highlights your lack of knowledge and explains your repeated postings of misinformation. Plus anyone relying on the media for their knowledge is going to end up with a distorted view as well as being a cynical, jaded individual.

Coops10

EdInvestor - do you think these papers would sell so much if they didn't highlight a negative spin? Maybe the BBC should get rid of it's show that highlights the poor workmanship of carpenters and plumbers, and replace it with a show that only shows how much of a good job they have done. Compulsive viewing I bet.

EdInvestor

BTW whoosh

whoosh wrote: »

His proposal is to leave about £20k for cash spending and invest c£80k

I agree with this idea. This will generate about 4 years' + income for your mother if put in a high interest account and then drawn on as needed and means she doesn't have to worry about the income withdrawals affecting the performance of the rest of the money.

This means the rest of the money can be invested with an eye to getting it properly structured to deliver genuine tax free income (ie return on capital, not withdrawal of it) in 4-5 years time.

You would not need to use expensive vehicles like the investment bond, but could instead use her ISA allowance, her entitlement to N&SI index linkers for tax free cash income , and the availablility of effectively tax free dividend income on equities in a risk reduced share portfolio or fund equivalent.

The reason why investment bonds (and with-profits funds) became such a panacea is that it takes a few years to structure an investment portfolio that is low to medium risk ( ie with proper asset allocation), pays out a tax free monthly income, plus has very low charges - which are the features which enable capital to grow while an income is being taken.

The IB delivers the tax free monthly money, but has high charges which eat into capital and suffers tax on the investment returns - thus it increases the risk that capital will be depleted -as you have seen compared with other methods.

It is actually not easy to achieve both your aims immediately - as you have discovered. But it can be done over time.

I suggest you say to the IFA that you like the idea of setting aside the 20k for the cash spending but are wary of using an IB again because of your earlier experience.Ask him to devise an alternative way of meeting your aims not using an IB.

Any decent IFA should be able to do this.

dunstonh

You would not need to use expensive vehicles like the investment bond

or

The IB delivers the tax free monthly money, but has high charges which eat into capital

OMG, do you actually read anything of the posts?