Halifax Financial Services Personal Investment Pla

vivvov

Hello All

Post in regards to:
Halifax Financial Services PIPs set up as Family Trusts in 2009.

Brief background:
My Mother has a cousin. Closest living relatives, grew up next door to each other, their mothers' were inseparable. Mum is 78, cousin is 83.
Cousin is now very frail and he fairly recently moved to a care home near to mum and mum (and Dad) became financial and welfare POA.
Then Dad died suddenly.
Neither mum or dad had much clue about what they were involved in.. but they'd kept a close eye on 'uncle' because he was single and had no family bar mum.
I have become increasingly involved as uncle became frail, due to being a social worker and attempting to instruct m and d. Mum and Dad were incredibly resistant plus Uncle is very private...all are northern working class and thought each other as poor as each other. Mum is clueless about money issues.. bar getting her pension and having a small cash ISA.
But as I've got more involved, especially after Dad died and Uncle's memory started to rapidly diminish, it's come to light that Uncle has set up 3 trusts (2 family trusts in 2009 and a gift trust in 2014)..and after sorting through 10 bin bags of financial correspondence it turns out Uncle is northern, private and surprisingly well off.
Mum is trustee on all 3 trusts and, turns out, has been seeing 'a man about uncle's money' every year..a financial advisor who initially worked for Halifax financial services then went to Prudential and who Uncle had stuck with in the move.
The Advisor has turned up at Mum's house, presumably annually, to get Mum to sign off as second trustee (after Uncle)..but did not let her read anything about what she was actually signing ! because uncle had instructed the Advisor not to tell her!!...and she trusted uncle because they've known each other all their lives etc!
Slightly bonkers...the trusts are clearly set up to deal with IHT..and are now, after this bull run, decent amounts put in have pretty much doubled in the 2009 trusts and increased significantly in the 2014 trust.

However, from what I can gather the funds that they are placed in are no Ferrari..more Skoda..old Skoda..hey ho....

The 2009 family trusts are Halifax Financial Services PIPs in Cautious Managed Fund.
The 2014 gift trust and a smaller ISA are in Prudential Pru fund 10-40.

Unfortunately it's now passed into mum needing to use financial POA to manage Uncle's finances and, although quite clueless and frightened, knows she needs to safeguard uncle's assets as best as she can.
I am also fairly clueless but in the land of the blind, having one partially sighted eye makes me the proverbial king...

As it stands, after the volatility of the markets last week which coincided with an hospital admission for uncle...and checking up on the actual trusts, I've suggested to mum that she needs to 'do something' with the trusts.

The PruFund 10-40 one seems to be a composite fund made up of mainly bonds, cash, property, fixed income..with around 30% in equities....we've written to the ' man that came round' /financial advisor that set it up with uncle to ask for his input.
However the Halifax Financial Services PIPs are all in Cautious Managed Funds which seem to provide the worst of all worlds..cruddy performance on the up and ditto in a falling equity market.

Mum wants to call and instruct Halifax Financial Services to move the trust monies to something similar to the PruFund...she simply wants to preserve Uncle's assets as best as possible without messing up the trusts or loosing money.....asap before any more equities ups and downs...just get it into something that roughly covers fees and inflation... Halifax have the POA info on file....and since the Pru man moved from Halifax around 2013 ish..no active financial advisor input.

Anybody got any salient advice...

Thank you in advance

dunstonh

As she has POA, she is legally required to do what is right for the individual and be seen to do what is right in case anyone challenges it.

Mum wants to call and instruct Halifax Financial Services to move the trust monies to something similar to the PruFund

Halifax cant do that. They pulled out of advice. It would require a product purchase and an increase in taxation.

How about leaving them where they are? They are not great but they are not awful. The cousin knew that when they made the decisions. So, maintaining them in something that is middle of the road is not going to create any issues.

vivvov

Thanks dunstonh
The cautiously managed fund set up of the trust mean that they're exposed to downturns because all the money is in equities..I think it's lost 4ish% over the last week or so..mum would like to move the trusts into a fund set up like the other trust...bonds etc..so even though the performance won't have the potential to increase like they have..they also won't decrease..like they just have...our thinking is along the adage bond percentage should equal age..ie 83%..

vivvov

....that way she's seen to have done what is right...she's 'big' on that..however limited her education is otherwise.

IanManc

vivvov wrote: »

As it stands, after the volatility of the markets last week which coincided with an hospital admission for uncle...and checking up on the actual trusts, I've suggested to mum that she needs to 'do something' with the trusts.

I agree with Dunstonh, and for what it is worth, I completely disagree that your mother, or anyone else, should do anything "after the volatility of the markets last week".

As well as that, suggesting that your mother "do something" when you have no deep understanding of the investments and no informed basis for knowing what the "something" ought to be, and apparently in light of an "adage", just serves to worry your mother entirely unnecessarily.

I know that your intentions are good, but tinkering with something you don't particularly understand, which isn't your responsibility and which was set up by someone for specific reasons carries considerable risks. Your mother is safeguarding the assets by maintaining the arrangements organised by her cousin and shouldn't be worrying about it.

dunstonh

The cautiously managed fund set up of the trust mean that they're exposed to downturns because all the money is in equities..

As is the Pru. However, both are invested cautiously which means they only have so much allocated to equities.

I think it's lost 4ish% over the last week or so.

Exactly. a tiny loss and half what a full equity based investment would have.

so even though the performance won't have the potential to increase like they have..they also won't decrease..like they just have...our thinking is along the adage bond percentage should equal age..ie 83%..

no real investor uses that so-called guide. You are in control of the POA. That means you have to do what is best. If your knowledge is not up to the job then you need to employ a professional.

You should not be suggesting anything you do not understand yourself. You have a responsibility. Your intentions may be good but you need to know what you are doing.

vivvov

We thought about advice received and were going to contact the Halifax Financial Services and engage with one of their financial advisors for advice but events overtook us..Unc has died. So the call to them was simply to inform them of his death...and that has frozen the account whilst grant of probate etc is sorted out.
Thanks All.