100k to invest/other

calibra101

Hi
I am currently responsible for 100k of my disabled daughters money. I need to ensure she gets a better return on it than its getting atm just sitting in a bank account. I will not go into detail as it is very complicated. She already has an ISA. It has been suggested to buy 30,000 worth of premium bonds just in case ready cash is needed.That leaves 70,000, I can possibly (not definitely) tie this amount up for 2 yrs. Would it be better to split this amount into 7 blocks of 10,000 so if I need to withdraw I will only be penalized for that particular one, if so please advise me where to put it. Thanks.

bigadaj

If it's probably needed in two years then you need to stay in cash, though you could try some in premium bonds.

With that sum and what initially sounds like a long term commitment then investments for at least some may well be advisable, and if you are an inexperienced investor and effectively a trustee then using an ifa may be advisable though will come with some cost.

calibra101

Thank you for reply but I now am skeptical about getting an ifa the reason being in 2006 I invested 125k of my own money..100k in one and 25k in another tied up for 5 yrs...at the end of maturity I earned £18 on the 100k and £14 on the 25k yet the ifa took his chunk initially. I really do not know what path to take.

dave875933

Ha I feel for you! Independent. Unbiased. Except even though they can usually cover their backs with complicated reports it's always one outcome they were at all bothered about if you read between the lines which was whopping upfront commission! All too familiar. (You may have a case for misselling though.)

As for the main issue at hand.

First premium bonds are statistically worse than bank accounts I think even at current low interest rates. Whether you think the chance of the big one is worth the loss of interest for two years or not is maybe a less quantifiable matter, although you could investigate what form of lottery is most likely to give the best chance if you risk the interest. At least with premium bonds the capital is the safest it can be anyway!

Second if you only have two years maximum that you can invest for then investing in anything is a bad idea in my opinion, especially given that markets are historically high with fundamental economic problems that may well bring about a correction in the next two years. (It was probably timing that messed you up with your own investments.)

So, I'd say just maximise return from bank accounts/bonds (not evil IFA investment bond like what you probably had). Make sure you get the best possible rates, maybe open current accounts and recycle money to meet the minimum income per month to get promotional rates (eg Santander 123). Maybe "lock" some of the money away in 2 year fixed rate deals (you can always get the money in an emergency even if you lose the interest, you just have to work out how much risk/reward there is in locking in), although with the fixed deals there is also the risk that interest rates will go up this year or next as they are historically very low. I don't know how the mechanics of opening/closing accounts work if it's in your daughters name but I guess you are used to this.

It may be that a good IFA (I believe there are some!) could recommend something but they'd have to be doing very well to give you a good chance of getting better than interest rates over a two year period also bearing in mind their fees (and even if there was a good chance, thered still be chance of failing to beat interest rates or even dropping).

I know it's hard but ultimately the decision is yours whatever advice you seek!

Oh and do be clear on tax! Already having an ISA doesn't say very much. Depending on her tax status, it may be wise for her to use the full ISA allowance every year.

badger09

calibra101 wrote: »

Thank you for reply but I now am skeptical about getting an ifa the reason being in 2006 I invested 125k of my own money..100k in one and 25k in another tied up for 5 yrs...at the end of maturity I earned £18 on the 100k and £14 on the 25k yet the ifa took his chunk initially. I really do not know what path to take.

I'm sorry but this makes no sense

I have no axe to grind, am not an IFA.

IFA = Independent Financial Adviser
They advise - the clue is in the name, and can manage investments, but you cannot invest in an IFA

What exactly did you invest in in 2006? £100k in one what? £25k in one what? Funds, shares, bonds, products with guaranteed capital protection but profits linked to the stockmarket, etc etc

bigadaj

calibra101 wrote: »

Thank you for reply but I now am skeptical about getting an ifa the reason being in 2006 I invested 125k of my own money..100k in one and 25k in another tied up for 5 yrs...at the end of maturity I earned £18 on the 100k and £14 on the 25k yet the ifa took his chunk initially. I really do not know what path to take.

If you provide some details of teh recommended investments then we mitts be able to give an opinion if there was mis selling and whether you might have grounds for a complaint.

Also was this an ifa or a bank as the latter are, or were, tied and restricted and their products were poor value.

You can have an initial meeting with an ifa for free, but won't get any definite rceommendatiosn without paying for them.

I'm normally not a fan of IFAs as they are too expensive in my opinion, and I prefer to do my own research and investing, but they are worthwhile for some.

dave875933

Badger don't be rude, anyway Calibra didn't say they invested in an IFA!

Of course "100k in one and 25k in another" makes little sense, but I have known people that have invested money through IFAs and haven't really undestood what on earth was happening but they just signed the forms and trusted the IFA. These people are not stupid, they just have other skills, and are too trusting of "professionals"!

The trouble is that the people who need IFAs most are those most likely to be screwed over by them!

Anyway, I think we are all agreed on here at least for what it's worth that if it's two years you best just stay in cash!

Don't forget that each bank only has £85,000 of compensation if it goes bust either, so if you haven't already you would need to split (and there would be delay getting compensation). Or, just use National Savings.

If you really think you "need" to invest the money in question (which you probably don't if it's for only two years, you are probably better keeping it safe instead), or other money, then unfortunately you need to do ALOT of work to understand what the hell everything is, whether you go with an IFA or not. It does become clearer eventually and you can then achieve relative simplicity.

xylophone

If you want it all in cash in one place and readily accessible, you could try NS&I- monthly income paid gross (handy if your daughter is not a tax payer). http://www.nsandi.com/savings-income-bonds

Oherwise savings rates here http://www.thisismoney.co.uk/money/saving/article-1583859/Best-savings-rates-General-savings-Internet-branch.html

badger09

dave875933 wrote: »

Badger don't be rude,

I wasn't aware I was being rude, and that certainly was not my intention. Nor is it my customary style.

dave875933 wrote: »

anyway Calibra didn't say they invested in an IFA!

That was my interpretation of what OP wrote

dave875933 wrote: »

Of course "100k in one and 25k in another" makes little sense,

I'm glad you agree.

I did ask OP for clarification of exactly what those investments were - unfortunately they have not replied.