Weslyan?

dunstonh

ceewash wrote: »

It's a booklet called " How our with profits fund works"

Has the rep explained that the fund will be subject to 20% tax (around 13% after taper relief)?
Has the rep explained why he/she is more willing to recommend an investment that increased tax when the ISA is tax free?
Has the rep explained why he/she is more willing to recommend an investment that increased tax when unwrapped UT/OEICs are next on the pecking order (no tax to pay unless dividends exceed £5000 a year.

xylophone

http://www.wesleyan.co.uk/pdf/34114/howourwithprofitsworksguide

This?

kidmugsy

Wesleyan is a respectable firm. But what makes you think that a With Profits bond might suit your situation?

ceewash

xylophone wrote: »

http://www.wesleyan.co.uk/pdf/34114/howourwithprofitsworksguide

This?

Yes that's the one.

ceewash

kidmugsy wrote: »

Wesleyan is a respectable firm. But what makes you think that a With Profits bond might suit your situation?

It was the only one he mentioned which is why I'm trying to find out more.

xylophone

It was the only one he mentioned

But if he is not independent he might not offer an alternative?

What made you seek a quote from Wesleyan?

How much money is involved?

What are your aims?

ceewash

He had come to discuss teachers' pensions for my self and my husband and retirement options. It was just a fact finding exercise for us. Nothing has been agreed.

xylophone

He had come to discuss teachers' pensions for my self and my husband

I don't quite see the connection between TPS and Wesleyan?

At all events, you are now in receipt of a pension from TPS - either there was a compulsory lump sum or you chose to commute some of your pension for a lump sum.

What are you trying to achieve with this money? Capital growth? A monthly/annual supplement to your income?

Approximately how much are you seeking to save/invest?

Had you considered stocks and shares ISAs for you/your spouse?

You might try an Independent Financial Adviser?

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

dunstonh

I don't quite see the connection between TPS and Wesleyan?

They have a sales division that focuses on teachers. Trying to flog them products basically like the old insurance agent model. Some link to NASUWT & AHDS exists

jamesd

ceewash wrote: »

He underlined in the booklet he gave us "We guarantee that the unit price in this fund will not fall"

Sigh. So he was exploiting your ignorance about how with profits schemes work to try to trick you.

First thing to know about with profits schemes is that by design they systematically lie to you about how the investments are doing. The reason the unit price won't fall is that they decide what value to give it. So they just never give it a lower value. Easy.

Now please look at the smoothing illustration chart on page 9 and I'll translate it into plain words for you:

1. When the investments do well we will lie to you about how well they did and increase the unit price by less than the real value increase.
2. When the investments do badly we will lie to you about how badly and not reduce the price by what the real decrease is. If we guarantee no decrease we'll hide even more of the gains in 1 so we can keep up the pretence.
3. If you want to sell at any time other than a guaranteed event part of our lies will be shown up. If that means a decrease we'll call it a "market value reduction" but the unit price won't have dropped because we take this out after using the unit value.

So there are two investment parts here: the fake unit prices they tell you and the real total value of all of the investments from all of their customers. They move money from the real pot to the fake values as they see fit.

Also notice that they say that only part of your initial money will go into the units. I think that is how they say that part will go into the units, part into the hidden real investment pot and part in commission to their sales person.

Most people don't like it when investment values drop. So the sales person was using that concern and the fakery built in to the scheme to make it seem safe, even though all they need to do to get rid of the fake safety is keep the unit value the same and use the market value reduction trick. Voila, all promises to you kept and you can still have lost money, in addition to the part that never arrived in units in the first place.