investments

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I've about about £70000 in a nationwide isa, I've already paid up my cash isa allowance for this year,i've had a chat with a financial advisor and he has advised me, (baring in mind I'm very cautious minded) to transfer it all, and that a good fund to invest in would be the PruFund Cautious Fund, he says it is currently showing expected growth rates of 6.7% per annum after product charges of 1.35%
I also have £150000 in the bank from the sale of my house, and once again he has said to invest in a ProFund Cautious Fund investment bond, which is expected to pay the same returns as before, he also states I can withdraw up to 5% each year without having to pay any tax, could any of you guys say if this sounds good, like I said I want someone to manage it for me and I'm very cautious so providing its better returns than a bank then it sounds ok to me, I know the risks of it could go down as well as up, also he tells me you are only covered upto £50000 in these types of investments
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  • Flobberchops
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    I'm just an amateur but £70k is an awful lot to be holding in cash. It's true you should keep a reserve of liquid, instantly accessible cash to hand - anything between 3 to 12 months expenses depending on who you ask - any anything over that really ought to be invested unless you're anticipating a large expense.

    For a cautious investor like you the name of the game is diversification. Funds are a great way to achieve that diversification and spread risk but even then I wouldn't put that kind of sum in just one fund. (What if PruFund goes bust next year?)

    So, keep some cash in the best ISA or interest-paying account you can find, and invest the rest in a diversified set of funds. In my opinion.
    : )
  • Broken_Biscuits
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    Agree just one fund is much more dangerous than no funds. Even if they throw the word cautious into the fund title.

    Where did you find your financial advisor from? I mean how can he predict the future returns of this particular fund for you?

    Investing in something you don't fully understand and paying someone who may not be up to the job he is employed to do could be much more risky than missing out on a few extra percent returns a year. At least you will hang onto your capital where it is.
  • Dird
    Dird Posts: 2,703 Forumite
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    What if PruFund goes bust next year?

    What IF PruFund goes bust? What would that look like on your investment platform? Presumably you still own the shares in the underlying companies?
    Mortgage (Nov 15): £79,950 | Mortgage (May 19): £71,754 | Mortgage (Sep 22): £0
    Cashback sites: £900 | £30k in 2016: £30,300 (101%)
  • xylophone
    xylophone Posts: 44,626 Forumite
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    Is this an independent financial adviser?

    https://www.unbiased.co.uk/
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    carlbhoy wrote: »
    he says it is currently showing expected growth rates of 6.7% per annum after product charges of 1.35%

    I'd consider that a high return for a cautious fund at the current time.
  • Superscrooge
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    carlbhoy wrote: »
    I've about about £70000 in a nationwide isa, I've already paid up my cash isa allowance for this year,i've had a chat with a financial advisor and he has advised me, (baring in mind I'm very cautious minded) to transfer it all, and that a good fund to invest in would be the PruFund Cautious Fund, he says it is currently showing expected growth rates of 6.7% per annum after product charges of 1.35%
    I also have £150000 in the bank from the sale of my house, and once again he has said to invest in a ProFund Cautious Fund investment bond, which is expected to pay the same returns as before, he also states I can withdraw up to 5% each year without having to pay any tax, could any of you guys say if this sounds good, like I said I want someone to manage it for me and I'm very cautious so providing its better returns than a bank then it sounds ok to me, I know the risks of it could go down as well as up, also he tells me you are only covered upto £50000 in these types of investments

    It seems very strange that he is telling you that your investments are only covered up to £50,000 in that type of investment fund and yet he is telling you to put all £85,000 into one fund??

    Are you sure he is an independent financial advisor and not tied to Prudential?
  • colsten
    colsten Posts: 17,597 Forumite
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    xylophone wrote: »
    Is this an independent financial adviser?

    https://www.unbiased.co.uk/

    You know that unbiased.co.uk just lists people who pay unbiased.co.uk to be listed?

    I agree, the OP needs to engage an IFA. Although it has a certain amount of diversification, the PruFund Cautious Fund for 100% of the OPs' money sounds at first glance a somewhat odd - and extremely expensive - choice. Charges should be well below 0.5%.

    http://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=FPFA5&univ=N
  • bigadaj
    bigadaj Posts: 11,531 Forumite
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    colsten wrote: »
    You know that unbiased.co.uk just lists people who pay unbiased.co.uk to be listed?

    I agree, the OP needs to engage an IFA. Although it has a certain amount of diversification, the PruFund Cautious Fund for 100% of the OPs' money sounds at first glance a somewhat odd - and extremely expensive - choice. Charges should be well below 0.5%.

    http://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=FPFA5&univ=N

    Not true about the paid for listing, it does initially but just turn off the sponsored ads button and others will appear, with less attractive looking listings of course.

    Projected total returns of 8% for a cautious fund in today's environment are totally ridiculous and are not credible, I wouldn't trust any advice from this individual.
  • DesG
    DesG Posts: 1,288 Forumite
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    It seems very strange that he is telling you that your investments are only covered up to £50,000 in that type of investment fund and yet he is telling you to put all £85,000 into one fund??

    All £220,000 not £85,000
  • Superscrooge
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    DesG wrote: »
    All £220,000 not £85,000

    Oops. I missed a nought off and read the amount as £15,000 rather than £150,000 :eek:
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